- Purchase price over four times the current Henry Hub price
Luxembourg, 14 March 2016: The Deutsche Oel & Gas Group is entering into a long-term supply agreement with Alaska Pipeline Company, a subsidiary of the ENSTAR Natural Gas Company, Alaska’s biggest natural gas supplier. An agreement to this effect was signed on 26 February 2016 in Anchorage, Alaska. This agreement runs from April 2018 and has an initial term until March 2021, with the option of subsequent renewal for two years. The contract provides for a fixed purchase volume of 22 million cubic feet a day in winter and 10 million cubic feet a day in summer. The contractual price for the fixed purchase by ENSTAR is over USD 7.00/MCF on average, which equates to more than four times the current Henry Hub price. The total volume of this long-term supply agreement amounts to up to USD 247 million.
“The successful conclusion of this agreement with ENSTAR is another important achievement for us, and confirms that our growth strategy is paying off. The agreement strengthens our finance base and secures us the liquidity we need for the further development of the Kitchen Lights Unit. On that basis we are looking forward to healthy and profitable growth over the next few years,” explained Kay Rieck, Chairman of the Board of Directors of Deutsche Oel & Gas S.A..