As part of its renegotiation of several ‘Gas and LNG supply contracts’ due to the effects of the coronavirus pandemic, Spain’s largest gas group, Naturgy, on 29th September announced it has agreed with one of its principal LNG suppliers to revise the terms of two supply contracts.
Neither the counterparties nor the full details of the revised agreements were disclosed. Under the terms of the agreement, the two parties have agreed to revise the supply conditions, from 2020. The group said the annual contracted volume has been reduced from 2020 and the price formula has also been revised.
Both revised contracts have modified expiry dates of September 2021 and September 2023. The group said it is holding discussions with its other suppliers to reach agreements before the end of the year.
Naturgy plans to cancel numerous long-term oil-indexed contracts for 20 TWh/year or about 6% of its annual sales volume.
The company had announced earlier this year that it will renegotiate several LNG supply contracts, in line with ordinary and extraordinary price review clauses in its contracts. Among its shorter-term contracts, the 4 Bcm/year from Nigeria is ending in 2023, the 4 Bcm/year contract in Trinidad and Tobago is ending in 2023, the 2 Bcm/year contract in Qatar is ending in 2025 while the 4 Bcm/year from Oman is ending in 2030.
Also, there is longer-term supply contract of 9 Bcm/year with Algeria until 2030, a 6.8 Bcm/year of LNG from the United States’ Cheniere and a 3.2 Bcm/year of LNG from Russia’s Yamal, which will all run until between 2037 and 2042.
It will also renegotiate a transit deal with Morocco for the 12 Bcm/year Maghreb pipeline which is expected to expire at the end of 2021 and the pipeline control authority will be reverted to the North African country.
Naturgy is a key player in the Atlantic Basin with a supply portfolio of around 30 Bcm/year, 11 LNG tankers and a capacity at several European regasification plants.
