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Endesa secures gas needs through 2007

20 August 2003 – Spanish utility Endesa has entered into contracts that will ensure its long-term needs for gas until 2007, according to reports Tuesday.

Endesa announced recently it had signed long-term supply deals with Nigeria and Qatar, to provide a total of 2 billion cubic metres annually, with delivery beginning in 2005.

“Our long-term needs have been provided for,” a source is reported as saying, adding that the group would continue with spot and medium-term purchases of gas.

Endesa estimated it would need 6 billion cubic metres of gas in 2007 to support its plans to expand in the Spanish residential and industrial gases markets, and supply its combined-cycle electricity generators. The firm currently operates gas-fuelled power plants with a capacity of 1400 MW in Spain, nearly seven per cent of its total installed capacity in the country. It plans to double that within four years.

The contract with Ras Laffan II from Qatar is for a total volume of one billion cubic meters (bcm), which represents five per cent of the total gas consumption in Spain for 2002. The ex ship contract is long term, with delivery in the liquefied natural gas (LNG) terminal and flexibility in destination and use. Gas will be mainly dedicated to the Iberian Peninsula and the Canary Islands.

The entry capacity in the gas system of Spain has been already contracted by Endesa. At the same time, Endesa ensures its capacity generation plan until 2007 with 2800 MW in new CCGTs in the Iberian Peninsula, as well as the projected new CCGT capacity for the extra Peninsular systems.

The company’s medium term target is to consolidate as the second gas operator in Spain, with a 13 per cent market share in supply or 20 per cent if the supply of CCGTs is included.

Endesa also has contracts with firms like Gas Natural and the Algerian firm Sonatrach.