Big gas deal with EDF

April 28, 2003, 09:35 CEST

Electricité de France National (EDF) is buying a billion cubic metres of gas annually over 15 years from Statoil, with deliveries set to start on 1 October 2005.

“This represents a sale to the power generation section, which offers the biggest potential for growth in European gas demand,” says Peter Mellbye, executive vice president for Natural Gas.

Market analyses show that the European gas market requires more deliveries from 2005-06, with growth driven by a widening gap between supply and demand in Belgium, Spain and France.

The UK also faces an increasing need to replace domestic gas production.

Much of the gas in demand is likely to be used for electricity generation.

“The EDF sales deal represents an agreement with a very competent and financially solid company,” Mr Mellbye emphasises.

“It must be seen as part of our strategy of linking up with the most important electricity generation players.”

EDF ranks as one of the world’s largest power companies. Statoil already has gas sales deals with four other European electricity generators – Germany’s RWE and Eon, France’s Suez and Iberdrola in Spain.

Last year, the group secured a major gas contract from Centrica in the UK. Both that deal and the one with EDF allow Statoil to decide where its deliveries should come from.

Such flexibility helps to boost the group’s commercial opportunities, Mr Mellbye emphasises.