France's Engie has reached an agreement with Norway's Statoil on the renegotiation of its long-term gas supply contract.
The agreement, which was signed November 30, “consists in a modernization of historical contracts to adapt them to a profound evolution of European natural gas markets” Engie said, adding that “contract prices have become fully market reflective and are now indexed on the French PEG hub. “
For 2016, Engie’s gas supply contracts with Statoil represent a total volume of 7.5 billion cubic meters per year, about 20% of the Group's portfolio of long-term gas contracts for supplies to France, it said.
“30 years after the signature of the Troll contract, which enabled the development of the giant Troll gas field on the Norwegian continental shelf, this agreement illustrates the fruitful long-lasting partnership and the quality of the commercial relationship which has always prevailed between ENGIE and Statoil” ENGIE said.
“Engie is indeed in continuous discussion with all its suppliers to maintain a coherent value-creative contractual framework for all stakeholder" it added.
“Engie and Statoil have demonstrated the possibility to find a commercial solution to modernize historical longterm contracts and to adapt them to today’s market environment” commented Edouard Neviaski, CEO of ENGIE's global energy management business unit, which manages the Group's activities on energy markets.
“This renegotiation proves the quality of the relationship between our two companies,” he added.
“With this agreement, Engie has de-risked its long-term supply contracts by adjusting their pricing to market conditions” he pointed out.
Earlier in April this year, Engie reached a similar agreement with Gazprom Export to renegotiate the price of its long-term gas supply contract.