Novatek Confirms Deal with EnBW

Novatek has confirmed that it has entered in a long-term gas supply deal with German utility Energie Baden-Württemberg (EnBW).

In mid July, EnBW announced that it has signed a 10-year gas deal with an unnamed foreign company for the supply of 1.9 billion cubic metres of gas a year.

Mark Gyetvay, deputy chairman of Russia's largest independent gas producer, confirmed that the arrangement during the company's second-quarter conference call.

"I can formally confirm...that we have executed our first commercial contract to sell natural gas on European markets with the conclusion of a contract with EnBW in Germany."

The gas will be delivered for an annual cost of approximately €600 million and supply will begin from October of this year.

Gyetvay indicated that the agreement signaled Novatek plans to supply the consumer market for LNG and natural gas in Europe, positioning the company when Russia will permit exports by parties other than state-owned gas giant Gazprom.  Gazprom presently holds monopoly rights over natural gas exports.

Gyetvay indicated that Gazprom was not a party to Novatek's contract with EnBW.