Statoil -Deal with Eni better reflects market, volume unchanged

OSLO, April 1 Tue Apr 1, 2014 11:13am EDT

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OSLO, April 1 (Reuters) - A revised deal for Norway's Statoil to supply gas to Italy's Eni will reflect the market situation better, while the volumes remain unchanged, Statoil said on Tuesday.

Eni said on Monday it had signed an agreement with Statoil over the renegotiation of long-term gas contracts.

"The details of the agreement are confidential, but the volume remains the same as before - about 5 billion cubic metres (bcm) of gas per year," Statoil spokesman Morten Eek said.

Europe's biggest gas suppliers, Statoil and Russia's Gazprom , have come under pressure in recent years to cut prices as European buyers seek relief from long-term deals that are linked to more expensive oil prices.

"The revised agreement reflects the changing conditions in the European gas market in recent years, typically characterized by an increase in liberalization and less linkage to oil prices and more towards other trade indexation in the different market regions in the EU and Eastern Europe," Eek said.

In February, Eni said it had agreed to revise its long-term gas supply contracts with Statoil and that it should boost the Italian firm's operating profit this year by around 1 billion euros ($1.4 billion).

The deal with Eni also means that an arbitration case that Eni had initiated against Statoil was finished, Eek said.

In 2013, Statoil's total European gas sales, including third-party gas, amounted to 84.1 billion cubic metres. ($1 = 0.7256 Euros) (Reporting by Ole Petter Skonnord; writing by Nerijus Adomaitis; editing by Jane Baird)

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