E.ON secured Gazprom energy supplies

Aug 29, 2006, 14:19 GMT

Duesseldorf - Europe's biggest utility group E.ON AG said Tuesday that it had secured long-term supplies of natural gas from Russian power giant Gazprom.

Under the deal Gazprom is to deliver about 400 billion cubic metres of natural gas through to 2036.

'This is an important contribution towards safeguarding long-term European gas supplies,' the Dusseldorf-based E.ON said.

'Against the backdrop of fierce global competition to obtain gas, E.ON has therefore succeeded in procuring Russian gas on competitive conditions for the European energy market on a long-term basis,' the company said.

The annual deliveries of about 24 billion cubic metres are equivalent to one third of the gas volume E.ON's offshoot Ruhrgas currently purchases.

Gazprom and E.ON signed an extension of 15 years on existing contracts to be delivered to Waidhaus in Germany, and also signed new contracts for additional gas to come via the 10.5-billion dollars Northern European Gas Pipeline (NEGP) to Greifswald, on Germany's Baltic coast, from 2010-2011 onwards.

The NEGP gas pipeline is being built by Gazprom, E.ON and BASF. E.ON will also participate in the construction of two new gas pipelines linking the NEGP to the German gas grid.