- Total revenue from existing supply agreement valued at up to USD 700 million
Luxembourg, 9 May 2017: On 6 March 2017 Deutsche Oel & Gas Group entered into a long-term gas supply agreement running until 31 March 2033 with Chugach Electric Association, Inc. (Chugach Electric), one of Alaska’s leading energy suppliers, which has now also been approved by the relevant regulatory authority, the Regulatory Commission of Alaska. Effective immediately Chugach Electric will, as part of its negotiable gas procurement, purchase natural gas at a minimum price of USD 5.75 (per thousand cubic feet) in the first year of the contract and a minimum of USD 6.25 in the final year of the contract. The precise volumes and purchase prices will be negotiated individually for each transaction; currently, the purchase price is USD 6.45.
A fixed natural gas supply was also agreed from 1 April 2023 to 31 March 2033. The first delivery year foresees a contractually fixed gas price of USD 7.16, which will gradually increase to USD 7.98 by the final delivery year. The annual supply volume amounts to around 1.8 billion cubic feet of natural gas. These fixed purchase volumes have a total value of around USD 139 million. Taking the negotiable gas purchases into consideration, the gas supply agreement is valued at up to USD 300 million.
“We are delighted to have gained another prestigious customer in Chugach Electric, which is placing its trust in us for the long term. We have established ourselves as the second-largest private natural gas producer in Alaska – and we want to continue growing,” said Kay Rieck, Chairman of the Board of Directors of Deutsche Oel & Gas S.A. “This agreement means we now have gas supply agreements with a total revenue volume of up to USD 700 million. We want to continue to build on this foundation and, at the same time, push ahead with the preparations for the start of oil drilling and production.