E.ON and Gazprom Reach Settlement on Long-term Gas Supply Contracts

E.ON AG has annouced that is has signed an agreement with Gazprom in resolution of their negotiations involving long-term gas supply contracts.

 "We are pleased about the completion of our negotiations and the good result for both sides. Gazprom and E.ON have shown once more that, as long-term strategic partners, they are able to arrive jointly at viable solutions. By signing today's agreements we are strengthening our long-standing, successful partnership with Gazprom," said Johannes Teyssen, CEO of E.ON AG.

The settlement includes a retroactive adaptation of pricing conditions for the price review period since Q4/2010.  The existing gas supply contracts run until 2036 and cover a total volume of up to 600 billion cubic metres (bcm). The negotiation agreement will also end the ongoing arbitration proceedings.

“The basic structure of the long-term contract hasn’t changed,” said EON spokesman Christian Drepper. “Elements with an oil linkage are still in the contract but with a significantly reduced risk.”

E.ON reported that with the completion of the talks with Gazprom, the company has now successfully renegotiated the pricing conditions of all of its currently oil-indexed volumes under its long-term gas supply contracts.