Long Term Gas Supply Agreemnt
Centrica PLC
25 June 2002
25 June 2002
Centrica and Gasunie sign major long term supply agreement
Centrica plc has today announced that its subsidiary British Gas Trading Ltd and
Dutch company N.V. Nederlandse Gasunie have reached agreement on a major long
term UK natural gas import contract.
Gasunie has been contracted to deliver 80 billion cubic metres of gas to the UK
over a 10 year period. The agreement, which is linked to UK gas prices could
represent a value of £5.3 billion (Euros 8 billion) over the life of the
contract.
Gasunie said today the transportation route for the gas is still being studied,
but is likely to result in an additional pipeline being built linking the UK and
the Continent. Depending on the infrastructure, the gas is expected to come on
stream as early as 2005.
The contract follows Centrica's first long-term European supply contract
announced with Statoil earlier this month. The Gasunie agreement, to deliver 8
billion cubic metres of gas per year, equates to 18 per cent of Centrica's
current demand. Together, the Gasunie and Statoil contracts will meet about 30
per cent of Centrica demand, more than 10 per cent of current UK demand.
Sir Roy Gardner, Chief Executive of Centrica, said: 'Our agreement with Gasunie
marks another very significant step for Centrica following our earlier agreement
to bring gas to the UK from the Norwegian Continental Shelf. We are particularly
pleased as this secures stable supplies for our customers for the foreseeable
future that are linked to UK market prices. It is also good news for UK plc,
encouraging development of additional transportation infrastructure to meet the
nation's gas demand.'
Under the agreement, Gasunie will deliver a higher volume in the winter months
(approximately 5 billion cubic metres) and a lower volume in the summer months
(approximately 3 billion cubic metres). Together with current agreements, this
will boost Gasunie's exports to almost 50 billion cubic metres per year.
Gasunie has been investigating the potential for exports to the UK for some time
as demand for gas is expected to exceed current supplies over the next few
years. This one contract would make the UK one of Gasunie's biggest export
markets.
George Verberg, Chief Executive of Gasunie, said: 'We are very satisfied with
this long-term agreement. We are proud to have British Gas as a customer and to
play a positive role in the security of supply of the United Kingdom. For us it
is also a successful way of coping with our loss of market share due to the
effects of liberalisation in our country. Moreover, it underlines the strategic
position of Gasunie and The Netherlands in terms of a stable reserves position,
high level of flexibility and central location between the large Western
European gas markets.'
Enquiries:
Centrica Investor Relations: 01753 494900
Centrica Media Relations: 01753 494085
Gasunie: C.E. Glerum +31 50 521 22 81 / +31 6 55 37 60 92
This information is provided by RNS
The company news service from the London Stock Exchange
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