ElectricitĂŠ 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.
âThis represents a sale to the power generation section, which offers the biggest potential for growth in European gas demand,â 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.
âThe EDF sales deal represents an agreement with a very competent and financially solid company,â Mr Mellbye emphasises.
âIt must be seen as part of our strategy of linking up with the most important electricity generation players.â
EDF ranks as one of the worldâs largest power companies. Statoil already has gas sales deals with four other European electricity generators â Germanyâs RWE and Eon, Franceâs 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 groupâs commercial opportunities, Mr Mellbye emphasises.