Edison Signs 20-Year US LNG Contract
Italy’s Edison, part of the French EDF group, has signed a 20-year contract to buy US LNG.
Under the sales and purchase agreement announced September 27, Edison will buy 1 million metric tons per annum (1 mn mt/yr) of LNG from Venture Global, equivalent to 1.4bn m3/yr gas, from its Calcasieu Pass LNG export facility currently being developed in Cameron Parish, Louisiana, USA.
Edison will purchase the gas on a free-on-board basis (fob) for the 20 year term starting from the commercial operation date of the Calcasieu Pass facility, expected in 2021. “This agreement will contribute to Edison’s gas supply portfolio competitiveness and diversification,” said Milan-based Edison.
Edison covers 20% of Italy’s gas imports through long term agreements for 14.4bn m3/yr (6.4bn from Qatar’s RasGas as LNG, the rest by pipe: 4bn from Libya, 2bn from Algeria and 2bn also from Russia); Edison received its 500th cargo under that RasGas 4.6mn mt/yr contract this July.
Edison’s 4.6mn mt/yr RasGas contract extends out to 2034, in contrast to many Qatari customers in Asia whose contracts expire in the early 2020s and who are already sounding out alternative US, Australian and Russian suppliers. EDF Group indeed recently has extended ongoing ‘flexible’ Qatari LNG offtake agreements with RasGas: for up to 2mn mt/yr into Dunkirk in France and up to 3.5mn mt/yr to EDF Trading into nearby Zeebrugge, Belgium.
Venture Global is developing LNG export terminals at both Calcasieu Pass and Plaquemines in the US Gulf, totaling 30mn mt/yr anticipated capacity.
Edison has 6.5 gigawatts of power plants in Italy and the Mediterranean basin, is a major Italian energy utility, and the main E&P unit within EDF group.
Mark Smedley