Po Valley signs gas sale deal
Sydney-based Po Valley has signed a $77.5 million (Aus.) gas offtake sales agreement with Italtrading for half of its forthcoming production from Sillaro and Castello gas fields in northern Italy.
MELBOURNE, Jan. 6 -- As Western Europe's gas supply comes under threat by Russia's action cutting supplies to Ukraine Jan. 1, Sydney-based Po Valley Ltd. has signed a $77.5 million (Aus.) gas offtake sales agreement with Italtrading SPA for half of its forthcoming production from Sillaro and Castello gas fields in northern Italy. Italtrading, part of the privately-owned AFIN Group, is a gas, energy, and renewables trading and wholesale firm, which won the supplies over 10 other potential buyers.
The agreement covers the initial commissioning period for both fields plus 3 years of supply until September 2012. Po Valley was awarded 20-year production licenses for the two fields late last year.
Castello has probable (2P) reserves of 6.3 bcf of gas and will have an initial production of 2.7 MMcfd, scheduled to come on stream in June-July. Sillaro has 2P reserves of 14 bcf and will initiate production of 3.8 MMcfd in September-October.
Po Valley says further agreements for the balance of production for the first 3 years from the fields are expected to be executed in the next month or so.