Germany's SEFE agrees to 10-yr natural gas deal with Azerbaijan's SOCAR
Germany's SEFE has agreed to a 10-yr deal to receive natural gas from Azerbaijan's SOCAR starting this year, with volumes gradually rising to 1.5 Bm3y, the two companies said on Tuesday.
State-owned SEFE, Securing Energy For Europe, is seeking long-term supply deals after losing most of its Russian pipeline gas in 2022 following Russia's invasion of Ukraine.
"We are establishing a new route for significant gas volumes to reach Europe, thereby diversifying our portfolio and increasing the security of supply of our customers," SEFE Chief Executive Egbert Laege said in a statement.
Financial details of the deal were not disclosed.
SEFE, the former division of Russia's Gazprom nationalized by Germany during Europe's energy crisis, supplies some 200 TWh of gas a year to industry and onward distributors mainly in Germany, Britain and other European markets.
Maximum purchases of 1.5 Bm3y under the deal with SOCAR would be equivalent to 15 TWh a year.
SEFE also operates 5.6 Bm3 of gas storage caverns, a quarter of Germany's total capacity.
Although Norwegian pipeline gas has taken up many slots left vacant by Russia, Europe needs to secure LNG from overseas ahead of the start of new LNG export facilities going up in the United States.
SOCAR, State Oil Company of Azerbaijan Republic, was involved in negotiations between European countries and Ukraine about potentially continuing or resuming the transit of gas through Ukraine after a historic Russia-Ukraine deal ended at the start of this year.
SEFE spokespeople said SEFE would take delivery of the gas in Italy and it would not be shipped via Ukraine.
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