Iberdrola to Supply LNG to DONG Energy from 2011

DONG Energy and the Spanish company Iberdrola have signed the commercial terms for Iberdrola to deliver LNG (Liquefied Natural Gas), corresponding to about 1 billion m3 of natural gas per year to DONG Energy from the end of 2011. The ten-year agreement that will take effect in 2011 includes an option for a five-year extension. Completion and signing of the final agreement is expected by mid 2010.

The LNG will be delivered to Gate terminal in the port of Rotterdam. DONG Energy is a co-owner of the terminal and also has part of the import capacity at its disposal. From the terminal, the Dutch transmission system provides access to the northwestern European gas market.

"We are very pleased to have Iberdrola as our LNG partner. The first building block was laid in 2007 when we invested in Gate terminal together with other European energy companies. Following our entry into the LNG market, we have been given many more opportunities for sourcing gas than those provided through the European pipeline network," said Kurt Bligaard Pedersen, Executive Vice President at DONG Energy.

"The agreement with DONG Energy is for many reasons a milestone in the European energy sector, in particular LNG, and underlines the importance of long-term contracts in achieving security of supply," said Angel Chiarri, Energy Management Director at Iberdrola. “It also demonstrates Iberdrola's agility in managing its liquefied natural gas portfolio."

"I consider the signing of this contract a crucial step in the further development of the Netherlands as a Northwest European Gas Hub. Given the importance of LNG to the further development of the Gas hub, my government has been doing all it can to support and facilitate initiatives for the construction of LNG facilities. This contract makes clear how important the investment of the Gate terminal is and will be for the future security of supply of Northwest Europe," said the Dutch Minister of Economic Affairs, Mrs Maria van der Hoeven.

DONG Energy aims to contribute to the security of supply in those markets, where the company is present. This will be done by ensuring supplies from different sources. The agreement with Iberdrola is an important step in these efforts, in which DONG Energy's own gas production and gas supplies from European partners as well as the future import of natural gas from Gazprom in Russia are the other three important elements.

Owners and customers at the Gate Terminal

The state-owned, Dutch transmission company, Gasunie, and the world's largest independent terminal operator, Vopak, each owns 40% of the terminal.

RWE-Essent, OMV-Econgas, E.ON Ruhrgas and DONG Energy each owns five percent.

In addition to their ownership interest, the four latter companies have at their disposal 12 billion m3 of the terminal import capacity per year.