Rosneft and INTER RAO UES Conclude 25-Year Gas Supply Contract
Rosneft and INTER RAO UES have concluded a contract on the supply of up to 875 billion cubic metres of gas. The contract envisages annual supplies of up to 35 bcm of Rosneft-produced gas to the power plants of INTER RAO – Electric Power Plants (or any other INTER RAO UES power plants) beginning on 1 January 2016 and running through 31 December 2040 on a take-or-pay basis. 32.3 bcm of gas is to be supplied in 2016.
Under the agreement, natural gas and dry stripped gas will be supplied from oil fields, which will allow Rosneft to significantly increase associated petroleum gas utilisation.
This contract has been approved by the boards of directors of INTER RAO UES and Rosneft.
Rosneft President and Chairman of the Management Board Igor Sechin said: 'Rosneft has significant reserves of gas and producing and selling this gas is a priority in terms of generating additional profit for Rosneft shareholders. Concluding an agreement to supply gas directly to Russia's largest generating utilities is the most effective way to monetise our reserves. It will also guarantee fuel supplies for power generation on transparent terms.'
'Our partnership with Rosneft, a global oil and gas major, is strategic in nature and will guarantee stable supplies of fuel to INTER RAO UES' power stations,' said Boris Kovalchuk, chairman of the management board at INTER RAO UES. 'This contract is designed to guarantee stability for our company in the long term and will allow us to considerably improve the efficiency of power generation in Russia.'
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