Gas Supply Agreement

RNS Number : 9453H

Scottish & Southern Energy PLC

06 June 2011

 



SCOTTISH AND SOUTHERN ENERGY PLC

GAS SUPPLY AGREEMENT

SSE (Scottish and Southern Energy plc) and Statoil have agreed to enter into a 10-year contract for the annual supply of 500 million cubic metres (mcm) of natural gas, to be delivered to SSE's Peterhead power station via the St Fergus gas terminal. 

The contract is expected to be completed later this year and, subject to that, delivery of gas is due to begin in the final quarter of 2012.  The price of the gas supplied under the contract will be linked to prevailing prices in the natural gas market.  The contract will also contain provisions to allow the supply of gas to be diverted to help meet SSE's other requirements if Peterhead is undergoing maintenance or repair work. 

In a typical year, Peterhead power station consumes 1,500 mcm of gas and produces enough electricity to meet the needs of around two million households.

The agreement with Statoil follows SSE's acquisition from Hess Limited of North Sea natural gas assets in February.

Alistair Phillips-Davies, Generation and Supply Director of SSE, said:

"Fuel supply contracts play a key part in helping us to meet our customers' needs and contribute to the long-term stability of our energy portfolio.  This agreement with Statoil builds on our acquisition of natural gas assets earlier this year and I am confident we will be able to conclude the contract later this year.   I am also optimistic that other opportunities will emerge that will allow us to continue to add to our mix of natural gas assets and contracts."                                                                                                                                                                                                                                                          

 

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