Yara has entered into an agreement with Gazprom for the delivery of natural gas to its plant in Le Havre, France.
Yara has entered into an agreement with Gazprom for the delivery of natural gas to its plant in Le Havre, France. The agreement is significant for Yara as it opens up for more flexible and competitive natural gas supply and pricing in Europe.
"The deal with Gazprom represents Yara's first direct purchase of Russian gas. It enables us to source gas more competitively and flexibly in Europe", says Head of Supply & Trade in Yara, Hallgeir Storvik.
Yara consumes roughly three billion cubic meters of natural gas per year in its fertilizer plants in the Netherlands, France and Italy, and is one of Europe's largest industrial consumers of natural gas. Most of the gas is used as feedstock for ammonia production, which is the most important raw material for finished fertilizer products.
"Yara has taken an active approach to secure improved terms in a more liberalized European energy market, and the Gazprom deal represents an important achievement in this respect," says Mr. Storvik.
"We are very pleased to be working with Yara on this major contract. We have ambitious growth plans for the French energy market, having opened our office in Paris in 2006. This contract is a good example of how we can combine local market knowledge with a strong trading capability to bring excellent results for our customer," says Vitaly Vasiliev, CEO of Gazprom Marketing & Trading.
As announced earlier, Yara will reopen its plant in Le Havre, France, with production expected to start in early March. The Le Havre plant transforms natural gas into ammonia and urea, which are the main components in the production of nitrogen fertilizers and chemicals. The plant has an annual production capacity of 400,000 tonnes of ammonia and 350,000 tonnes of urea. Yara owns 47,85 % of the urea plant through a joint venture with Grande Paroisse, a subsidiary of the Total group. Production was halted in July 2006, and the reopening is welcome news for the 135 employees at the Le Havre plant.
Gazprom Marketing & Trading started trading natural gas on the French market in October 2006 and is now delivering gas to large industrial customers in various parts of France. Based in London, the company is Gazprom's energy trading subsidiary, with local offices in Paris and Houston.