Statoil Signs 10 Year Centrica UK Supply Contract

Statoil, Norway's largest oil company, has said that it has won a ten year contract worth as much as 50 billion kroner ($6.3 billion) to sell natural gas to Centrica of the UK. The gas accord is Statoil's biggest since 1986.

The oil and gas producer will supply five billion cubic meters of gas annually to Centrica's British Gas Trading Ltd. unit from October 1st, 2005. The contract strengthens Statoil's position as the largest importer of gas to the UK, according to a statement to the Oslo exchange.

“The contract secures a good commercial outlet for Statoil's gas,” said Peter Mellbye, a Statoil executive responsible for natural gas. It is “key to the future development of new gas fields off Norway to increase supplies into Europe.”

While it's difficult to estimate the total value of the contract, the company expects the gas to sell for between 0.7 krone and 1 krone per cubic meter over the contract period, Mellbye said.

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