By Dow Jones Business News,
December 18, 2013, 11:25:00 AM EDT
By Liam Moloney
ROME--Eni SpA ( E ) has struck a deal with Dutch firm GasTerra for long-term natural gas supplies at a lower price as is
renegotiates contract terms with a host of companies amid weaker demand in Europe.
"Eni achieves a significant price reduction and a change in the price indexation, which will include a link to hub
prices," said the Italian energy company in a statement Wednesday.
Earlier this year, Eni executives threatened to take GasTerra, in which Royal Dutch Shell PLC (RDSB) and Exxon Mobil
Corp. ( XOM ) each own a 25% stake, to arbitration over contracts that it said made long-term gas supplies unprofitable.
Eni has managed to renegotiate deals with some of its biggest gas suppliers in the past year, including Russia'sOAO
Gazprom. The problem is that long-term supplies have become more expensive than gas bought on the spot market; and in
turn, this has hit earnings as buyers turn their backs on the more costly suppliers.
Eni is presently in arbitration with Statoil ASA as it seeks to have the Norwegian oil company agree to changes to how
much it pays for gas. The outcome of the arbitration isn't expected for many months.
Eni Chief Executive Paolo Scaroni recently said that the company's most expensive long-term gas supply contracts are
Write to Liam Moloney at firstname.lastname@example.org
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