Brussels, 12/12/2002 (Agence Europe) - The European Commission has an agreement with Nigerian gas company Nigeria LNG Ltd (NLNG), which agreed to delete a clause preventing one of its European customers, the Italian company, Enel, to re-sell the gas outside its national borders. The Commission has been investigating for some time gas supply contracts between non-EU producers and European companies, some of which prevent the sale of gas outside their national borders and therefore constitute an infringement of European legislation. The Commission has opened other investigations into Russian gas company Gazprom and Sonatrach (Algeria) which together account for a very large proportion of gas imported in the EU. NLNG is the second largest supplier of liquefied natural gas (LNG) in Europe with approximately 5 billion cubic meters of gas shipped every year to customers in Italy, Spain, France and Portugal. The investigation showed that only the contract with Enel, one of its many European contracts entered into by NLNG, contained a territorial sales restriction, from which NLNG has agreed to release its customer allowing Enel to sell gas onto whoever it wishes. NLNG also undertook not to introduce territorial restriction clauses and use restrictions into its future gas supply contracts with European companies, which prevent the buyer from using the gas for other purposes than those agreed upon. NLNG confirmed that none of its existing gas supply contracts contained so-called profit splitting mechanisms effecting the EU markets and that it would not introduce these in future contracts. These oblige the buyer to pass over to the producer a share of the profits made when re-selling the gas outside its national borders or when the gas is re-sold to a customer using the gas for a different purpose than that agreed.
The Commission is hopeful that a satisfactory solution will also be found with Gazprom and Sonatrach. The Russian company has already informed the Commission that it will not introduce territorial restriction clauses in its future gas supply contracts and is currently negotiating the outstanding issues for the existing contracts. The Commission points out that a breakthrough was achieved last July concerning the gas market in Norway. Statoil and Norsk Hydro, Europe's largest gas producer, undertook to stop restrictive commercial practices in their so-called "GFU" system and also made commitments, "not to introduce territorial restrictions and use restrictions in its gas supply contracts".