Gazprom and E.ON Ruhrgas Extend Gas Contracts and Sign New Pipeline Agreement

Strategic Insights -

Gazprom, the Russian gas giant, and E.ON Ruhrgas AG, a German energy company, have signed agreements to extend current gas contracts by 15 years and to supply additional gas through the North European Gas Pipeline. The extended contracts, which will run from 2020 to 2035, will see annual gas supplies amount to about 20 billion cubic meters, with a total of up to 300 billion cubic meters over the period. The new pipeline agreement will enable E.ON Ruhrgas to import up to 4 billion cubic meters of gas per year. This partnership is crucial for E.ON Ruhrgas, as it compensates for a drop in supplies from Western European sources and ensures additional volumes of gas for the growing European market.

Key Takeaways:

  • Gazprom and E.ON Ruhrgas have extended their current gas contracts by 15 years, from 2020 to 2035.
  • Annual gas supplies under the extended contracts will amount to approximately 20 billion cubic meters.
  • The total supplies from 2020 to 2035 will be up to 300 billion cubic meters.
  • The North European Gas Pipeline will have an initial capacity of 55 billion cubic meters.
  • The first line of the pipeline, set to begin operating in 2010, will have a capacity of 27.5 billion cubic meters.
  • The initial contract for the delivery of gas via the North European Gas Pipeline was signed with WINGAS GmbH in 2005, for 9 billion cubic meters over 25 years.
  • DONG Energy has signed a contract for 1 billion cubic meters of gas per year over 20 years, with the option to increase annual supplies.
  • The construction of two new gas pipelines will connect the North European Gas Pipeline to the existing gas supply system in Germany.