Eni Sees Not Taking Minimum Take-Or-Pay Gas Amounts In 2-3 Years

Eni Sees Not Taking Minimum Take-Or-Pay Gas Amounts In 2-3 Years
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Τρι, 8 Μαΐου 2012 - 19:10
Eni SpA (E), Italy's biggest energy company by market value, Tuesday said it expects not to take the minimum amount of natural gas in the next two to three years under its long-term take-or-pay contracts, as demand for the fossil fuel remains weak amid a European economic slowdown.
Eni SpA (E), Italy 's biggest energy company by market value, Tuesday said it expects not to take the minimum amount of natural gas in the next two to three years under its long-term take-or-pay contracts, as demand for the fossil fuel remains weak amid a European economic slowdown.

Under such contracts, Eni has agreed with its gas suppliers, such as OAO Gazprom (GAZP.RS) and Algeria's state-owned Sonatrach, to pay for a minimum amount of gas whether the Rome-based takes that amount or not.

The amounts of prepayments range from 10% to 100% of the full price, said Eni in its 2011 annual report presented at the shareholders' meeting in
Rome Tuesday.

The right to collect prepaid gas expires within a 10 year-year term in some contracts or remains in place until contract expiration in other arrangements, Eni said.

The Italian company also said that based on the long-term forecasts of rising European gas demand, it expects to "recover volumes of gas which we have been prepaid."

Eni's gas contracts cover annual supplies of about 80 billion cubic meters and have a residual life of about 17 years, it added.

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