DONG Energy and the Spanish company IBERDROLA have signed the commercial terms for IBERDROLA to deliver LNG (Liquefied Natural Gas)(*), corresponding to about 1 billion m3 of natural gas per year to DONG Energy from the second half of 2011. The ten-year agreement that will take effect in 2011 includes an option for a five-year extension. Completion and signing of the final agreement is expected by mid 2010.
The LNG will be delivered to Gate terminal in the port of Rotterdam. DONG Energy is a co-owner of the terminal and also has part of the import capacity at its disposal. From the terminal, the Dutch transmission system provides access to the north-western European gas market.
“The agreement with DONG Energy is for many reasons a milestone in the European energy sector, in particular LNG, and underlines the importance of long-term contracts in achieving security of supply,” said Angel Chiarri, Energy Management Director at IBERDROLA. “It also demonstrates IBERDROLA’S agility in managing its liquefied natural gas portfolio.”
“We are very pleased to have IBERDROLA as our LNG partner. The first building block was laid in 2007 when we invested in Gate terminal together with other European energy companies. Following our entry into the LNG market, we have been given many more opportunities for sourcing gas than those provided through the European pipeline network”, says Kurt Bligaard Pedersen, Executive Vice President at DONG Energy.
Through this agreement, IBERDOLA is not only making a significant contribution towards energy self-sufficiency in Northern Europe, but also aligning the volumes of gas it manages over the long-term, around 6 bcm a year, with placement of these volumes. In addition, just as it does with its suppliers (Nigeria, Algeria, Egypt, Trinidad and Tobago and Norway) it is also diversifying final users for its gas, now focused on Spain, the United Kingdom and the U.S.
DONG Energy aims to contribute to the security of supply in those markets, where the company is present. This will be done by ensuring supplies from different sources. The agreement with IBERDROLA is an important step in these efforts, in which DONG Energy’s own gas production and gas supplies from European partners as well as the future import of natural gas from Gazprom in Russia are the other three important elements.
Owners and customers at the Gate terminal
The state-owned, Dutch transmission company, Gasunie, and the world’s largest independent terminal operator, Vopak, each owns 40% of the terminal. RWE-Essent, OMV-Econgas, E.ON Ruhrgas and DONG Energy each owns five per cent. In addition to their ownership interest, the four latter companies have at their disposal 12 billion m3 of the terminal import capacity per year.
Facts on DONG Energy
DONG Energy is one of the leading energy groups in Northern Europe. We are headquartered in Denmark. Our business is based on procuring, producing, distributing and trading in energy and related products in Northern Europe. We have approximately 6,000 employees and generated just under DKK 50 billion (EUR 6.6 billion) in revenue in 2009. For further information, see www.dongenergy.com.
This communication does not constitute an offer of purchase, sale or exchange or a request for an offer of purchase, sale or exchange of values. The shares of Iberdrola S.A. cannot be offered or sold in the United States, except if this is carried out through a declaration of effective notification of what is laid out in the Securities Act or under the protection of a valid exemption of the need for notification.