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Gazprom, E.ON sign framework agreement to swap assets

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MOSCOW, July 13 (RIA Novosti) - Russian energy giant Gazprom [RTS: GAZP] and Germany's E.ON AG have signed a framework agreement to swap assets in production, trade and sale of natural gas, and in the power industry, the companies said Thursday.

"Gazprom and E.ON AG agreed to swap a 25%-minus-one-share stake in the Yuzhno-Russkoye gas and condensate deposit to an E.ON AG stake including stakes in Hungarian gas companies E.ON Foldgaz Storage and E.ON Foldgaz Trade (50% minus one share correspondingly), as well as 25% plus one share in regional electricity and gas company E.ON Hungaria. Gazprom will also receive additional compensation," the joint statement said.

The Yuzhno-Russkoye deposit in the Tyumen Region, which holds more than 1 trillion cubic meters of natural gas, will be a core source of supplies for the $10.5-billion North European Gas Pipeline (NEGP), an ambitious Gazprom-managed project to pump natural gas to Germany across the Baltic Sea.

The sides plan to conclude detailed agreements on the asset swap by the end of the year. The agreement on Gazprom's purchase of Hungarian assets must be approved by the European Commission and Hungary's authorities.

E.ON and Gazprom also agreed jointly to implement electric power production projects on gas power plants in Europe.

"Against the background of increasing demand for natural gas, the companies are making an important contribution to make long-term energy supplies to Europe more reliable," the companies said.

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