Norway secures first gas sales contract with Italy

Norway's Gas Negotiating Committee (GFU) has secured an agreement to supply 150 billion cu m of gas to Italy's Snam SpA for 25 years beginning in 2000. The deal supports the economics of two major pipeline systems under construction in northern Europe, Zeepipe, and NorFra. Deliveries are expected to reach a plateau level of 6 billion cu m/year in 2002. The contract is Norway's first gas deal with Italy and is valued at 90 billion kroner ($13.8 billion) at current gas prices.

Feb. 24, 1997

2 min read

Norway's Gas Negotiating Committee (GFU) has secured an agreement to supply 150 billion cu m of gas to Italy's Snam SpA for 25 years beginning in 2000.

The deal supports the economics of two major pipeline systems under construction in northern Europe, Zeepipe, and NorFra.

Deliveries are expected to reach a plateau level of 6 billion cu m/year in 2002. The contract is Norway's first gas deal with Italy and is valued at 90 billion kroner ($13.8 billion) at current gas prices.

Den norske stats oljeselskap AS (Statoil), leader of the GFU-recently expanded to include foreign firms producing gas off Norway-said a decision on which fields will supply the gas will be reached later.

Statoil said the negotiating team for the talks with Snam, which began in spring 1995, consisted of GFU permanent members Statoil, Norsk Hydro AS, and Saga Petroleum AS, plus Total Norge AS and Mobil Exploration Norway AS.

The gas will be exported from Norway via the Zeepipe and NorFra trunklines to Zeebrugge, Belgium, and Dunkirk, France, respectively, from where it will be transported to Italy through the continental gas grid.

Statoil said Italy consumed 53 billion cu m of gas in 1995, and is expected to require 90 billion cu m of gas in 2010. The country imports 60% of its gas, and the proportion is rising.

Norwegian gas is anticipated to supply 7% of Italy gas needs in 2005, while Norway's share of the Belgian, French, and German gas supply markets is expected to reach 30-40% after 2000.