France’s Engie on Friday said it has reached an agreement with Norway’s Statoil, earlier in the week, to renegotiate the long-term gas supply contracts.
“This agreement consists in a modernization of historical contracts to adapt them to a profound evolution of European natural gas markets: thus contract prices have become fully market reflective and are now indexed on the French PEG hub,” Engie’s statement reads.
In 2016, Engie’s gas supply contracts with Statoil represent a total volume of 7.5 billion cubic meters per year, about 20 percent of the group’s portfolio of long-term gas contracts that can supply France.
The initial contracts that enabled the development of the Troll gas field on the Norwegian continental shelf were signed 30 years ago.
Édouard Neviaski, CEO of Engie’s Global Energy Management business unit, which manages the group’s activities on energy markets said that, “with this agreement, Engie has de-risked its long-term supply contracts by adjusting their pricing to market conditions.”
The French company has previously reached an agreement to adapt the price of long-term gas supply contracts with Gazprom Export.