Italian firm wins $578m Qatar LNG discount
Milan, September 12, 2012
Italian energy group Edison has won in arbitration a 450 million euro ($578 million) discount on its liquefied natural gas (LNG) supplies from Qatar’s RasGas, a verdict that paves the way for other European firms to secure cheaper energy and pass cost savings to cashstrapped consumers.
"The court decision has accepted the merits of Edison's positions ... the overall impact on 2012 accounts of Edison is estimated in 450 million euros," the company said.
Edison, which last year successfully challenged Russian gas export monopoly Gazprom to reduce the cost of long-term gas supplies, can hold up as an example to peers its latest coup against the world's biggest LNG exporting country, Qatar.
"It's a breakthrough win as it paves the way for other European companies in the same situation to renegotiate gas prices with Qatar," a source close to the arbitration process told Reuters.
"The price review success has the potential to reduce the final gas sale to businesses and households in Italy and also Europe as other companies might follow the same path in renegotiating the contracts with their suppliers," the source added.
At issue is a decades-old system of indexing gas supplies to oil prices that has hurt European utilities because they are forced to sell the gas at a loss, losing billions of euros in the process.
Qatar, which liquefies its gas for export on tankers, adopted the same model set by Europe's two biggest pipeline exporters Russia and Norway by linking gas supplies to oil prices.-Reuters
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