El Paso sign $1 billion LNG deal
18 Oct 2001
El Paso Global LNG, a subsidiary of El Paso Corporation, announced today that it has signed a definitive liquefied natural gas (LNG) purchase and sale agreement with a consortium of producers led by Statoil ASA. The deal is estimated to be worth over $1 billion.
According to a statement, the consortium will develop the Snoehvit Project in northern Norway and provide El Paso with an annual delivery of approximately 1.8 million tons of LNG during the 17-year primary term of the agreement.
The agreement will account for more than 40 percent of the total capacity to be produced at the Snoehvit Project's LNG liquefaction facility, which will be located on Melkoeya Island, Norway.
The consortium will be responsible for developing proven reserves that support the project, constructing the pipeline infrastructure and liquefaction facilities, as well as making all necessary LNG shipping arrangements.
Norwegian governmental approvals for the project are expected early next year, and deliveries are scheduled to commence in 2006.
El Paso will receive LNG shipments equivalent to an estimated 91 billion cubic feet per year of natural gas to be delivered at the existing Cove Point, Maryland LNG regasification terminal, or other North America and European destinations where the LNG will be regasified and sold as natural gas.
