Statoil Inks Deal with Sonatrach for LNG Terminal at Cove Point
Sonatrach and StatoilHydro signed an agreement sealing a long-term partnership at the Cove Point receiving terminal for liquefied natural gas (LNG) in the USA.
Under the terms of the contract, Sonatrach will receive access to 2 billion cubic meters per year of regas capacity at the Cove Point terminal for 15 years from beginning of 2009.
As part of the arrangement, StatoilHydro will also purchase 1 billion cubic meters of LNG per year to Cove Point from 2009 to 2014.
The terms and conditions governing the arrangement have been agreed in the form of binding Heads of Agreements (HOAs).
The agreement has been signed by Dr. Chawki Mohamed Rahal, Vice President Commercialisation of Sonatrach and Kare Rosandhaug, Country President for Algeria, in the presence of Mohamed Meziane, CEO of Sonatrach and his Excellency Per Kristian Pedersen the Norwegian Ambassador to Algeria.
"This agreement allows Sonatrach to reinforce and consolidate its position in the gas market of the Atlantic basin following the acquisition of capacity at Isle of Grain in the UK, and to capture arbitrage opportunities with other markets," says Dr. Rahal. "It is also a considerable advance in the progressive internationalisation of Sonatrach, in gaining downstream access in the world's largest gas market in a way similar to what has already been achieved in the UK, Spain and Italy."
"The agreement is an important step in ensuring supply for the Cove Point Expansion project while expanding StatoilHydro's presence in the US," says Mr Rune Bjornson, Executive Vice President for Natural Gas in StatoilHydro. "It is an important broadening of the successful commercial relationship between Sonatrach and StatoilHydro, and strengthens StatoilHydro's role in the international LNG market, supplementing equity supply from Snohvit."
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