Engie buys DNO's Norwegian gas production for four years

DNO sold all of its gas production from the Norwegian continental shelf over a period of four years to French utility Engie, for an undisclosed amount.

It said that a U.S. loan facilitated the deal, as U.S. banks increase funding for the fossil fuel sector. The company also stated that it is in talks over a similar agreement of offtake and financing facility related to its North Sea oil production.

DNO announced in a press release that the offtake agreement will take effect on October 1. It covers DNO’s increased production of gas following its March acquisition of assets from Sval Energi.

Sval's purchase quadrupled DNO’s North Sea production, which now stands at about 80,000 barrels equivalent of oil per day. About half of this is natural gas.

Engie didn't immediately respond to our request for comment.

DNO has not disclosed the exact volume of its four-year contract to Engie. However, DNO and Sval Energi produced 1,82 bcm from the Norwegian continental Shelf last year.

DNO has entered a financing agreement with an unnamed U.S. Bank for up to 500 million dollars. This money will be used for Sval Energi’s debts as well as for general corporate purposes.

In a press release, DNO Executive Chairman Bijan Mossavar Rahmani stated that "we have received strong interest from buyers to prepurchase the enlarged North Sea Production". (Reporting from Nerijus Adomiaitis and America Hernandez, Paris; editing by Barbara Lewis.)

(source: Reuters)