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 end 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.

'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.

'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.'

Tags: DONG Energy