Short-term gas deals to get 10% of Fos Cavaou LNG

The Fos Cavaou LNG terminal in southeastern France will have to free 10% of its 8.25 billion cu m/year capacity for short-term contracts when it comes into operation beginning in 2008.

June 4, 2007

2 min read

Doris Leblond
OGJ Correspondent

PARIS, June 4 -- The Fos Cavaou LNG terminal in southeastern France will have to free 10% of its 8.25 billion cu m/year capacity for short-term contracts when it comes into operation beginning in 2008. The Energy Regulatory Commission on May 16 issued the notice to Société du Terminal Méthanier de Fos Cavaou (STMFC), the company that will operate the terminal on behalf of its owners Gaz de France 69.7% and Total 30.3%.

The move is in line with the commission's policy to bolster competition in southern France, which lacks gas supply sources. In addition, access to GDF's and Total's gas lines remains "uncertain" over the 2008-11 period, the commission said. It also indicated that the current gas release program will gradually end over 2008.

Decisions for the development of interconnections with Spain are still pending, so it is necessary to allocate the full available capacities of the Fos Cavaou terminal to boost competition for final consumers in southern France.

The 10% spare capacity will be for 3-year, short-term contracts involving 10 Tw-hr/year, equal to 825 million cu m. The tariff, suggests the commission, should be the same as that of existing terminals—about €1.3/Mw-hr over 2008-11.

The commission also indicates that annual operating costs for Fos-Cavaou will average €38 million over the period, while costs engaged until the terminals comes on stream are estimated by the operating company at around €11 million. Full cost of the terminal up to the time it comes on stream should be about €588 million.