Gazprom signs supply contract and JV with Italian utilities
Gazprom subsidiaries Gazpromexport and ZMB signed an agreement with Italian utilities A2A and Iride on Thursday for a joint venture (JV) on the Italian gas market.
Additionally, the group signed a long-term contract with the utilities, in which the Russian major will deliver 900 million cubic metres (Mm3) of gas to the joint venture each year from October 2008 until at least 2022. The contract may be extended for a further five years, while the annual volume could increase over the subsequent years. The trading arm of A2A, Plurigas, will manage the gas shipping in the start-up phase of the joint venture.
Under the JV, the two utilities will set up a company (A2A (70%) and Iride (30%)), which in turn will assume 50% of the subsequent JV with Gazprom.
Gazprom will appoint the chairman of the joint venture for the foreign partners, while A2A will choose the managing director for the Italian partners.
The deal is due to be closed by the end of this year once all relevant documents and approvals have been obtained.
The move marks part of the company’s diversification strategy, “aimed at the fulfilment of both its own power plants’ needs and the demand of its customers”. A2A manages a gas portfolio of 6 billion cubic metres (Gm3), which together with its stake in Edison, ranks it as the third-largest operator in the gas sector. Iride has a gas portfolio of 2 Gm3 and is currently developing two regasification terminals in Italy (Livorno and Gioia Tauro). ZMB is wholly owned by Gazprom and markets Russian and central Asian gas in Europe.
This is the second joint venture Gazprom has racked up with Italian utilities, following its recent deal with Enia through ZMB and Centrex (see ESGM 14.180). It is also continuing with its short-term contract it signed with A2A last year for delivery of gas between April 2007 and October 2008. Gazprom also supplied Hera and EGL with gas for the 18-month period. Both companies were unavailable to comment on whether they are also in talks with Gazprom over extending their supply contracts at the time of publication. One market source told ICIS Heren that the Russian gas major was also in supply talks with EGL.
ZMB ups stake in Centrex; Gazprom earned EUR 4-5 billion from Eni/Edison
ZMB increased its stake in Centrex from 25% to 50% plus one share, according to Italian watchdog AGCM. Centrex is Gazprom’s Austrian affiliate and is involved in marketing gas, mainly in the EU and the CIS countries. The aim of the increase is to allow the company to establish its joint ventures in order to sell gas into Italy. Gazprom has long eyed the end-user sector in the gas-hungry and high-priced Italian market.
Gazprom pocketed EUR 4-5 billion in selling gas to Italian energy companies Eni and Edison on the Austrian/Slovakian border in 2007, according to AGCM. However, it pointed out that not all this gas may arrive in Italy as Eni and Edison may be selling some of the fuel into other member states via gas pipelines. It based the annual turnover on the “location of client” principle, and not on place of delivery. DL
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