Centrica and Elsta fuel purchasers sign Interconnector contract

Centrica and the fuel purchasers for the Elsta cogeneration project in the Netherlands today announced their agreement on a contract for gas deliveries through the UK-Continent Interconnector pipeline.

It is the first agreement Centrica has signed to supply direct to a major continental European end user, rather than a gas trading/transmission company – and the first UK gas export sale to a power project.

Under the agreement, Centrica, through its subsidiary British Gas Trading, will sell to Inkoopcombinatie Elsta V.O.F. around 1 billion cubic metres per annum over a period of 8 years.

The partners in the Inkoopcombinatie buy electricity and steam from the Elsta cogeneration project on the Dow Benelux site at Terneuzen in the south west of the Netherlands.

Although some technical work still has to be done, deliveries should start in October 1998, when the Interconnector is due to open, and will be drawn from Centrica's portfolio of UK continental shelf reserves and gas purchase contracts.

The agreement provides for deliveries to be made at the Interconnector outlet in Zeebrugge and the buyers will be responsible for onward transportation through Belgium and the south-west of the Netherlands to Terneuzen.

Roy Gardner, Chief Executive, Centrica, said;

"This agreement marks a further significant step in expanding Centrica's continental European customer base and a major innovation in supplying through the Interconnector to a large cogeneration plant. I look forward to building on our relationships with the Elsta partners."

"The contract with Centrica and related transportation arrangements give us access to competitively-priced gas from the UK and further enhance the economics of cogeneration at Terneuzen," said Henk de Kraa, spokesman for Inkoopcombinatie Elsta.