WINGAS buys the "Saltfleetby" onshore natural gas field

A further step towards expanding British activities
Kassel. The German gas company WINGAS GmbH (WINGAS) has stepped up its activities in the UK and purchased the "Saltfleetby" natural gas field from the Australian Roc Oil Company Limited (ROC) for £ 44 million. The sale is subject to approval by the relevant authorities.

The Saltfleetby field is the largest onshore natural gas field in the UK and has been exploited by ROC since 1999. "Our first step has been to secure this attractive field for natural gas storage in the UK", announced Dr. Rainer Seele, Chairman of the Board of Directors. "Over the next few months, we will further assess the field's geological parameters and commercial potential to determine its further development."

As early as 2002, WINGAS concluded a framework agreement with Gazexport, a subsidiary of the Russian company Gazprom, to market Russian natural gas in the trading centers of the UK. Supplies of Russian natural gas are very important for the UK's security of supply. Due to increasing demand in the UK for imported natural gas, the company is expecting good sales figures in the medium term. Since domestic production of natural gas is decreasing, the UK will become increasingly dependent on imports over the coming years. "As a competitive supplier, we will be making a considerable contribution to the country's long-term, reliable supply of natural gas, the energy of the future", explained Seele.

The booking of capacities on the planned BBL (Bacton-Balgzand-Leiding) North Sea pipeline from the Netherlands to the UK is to be viewed in this context, he said. The pipeline, due to be completed by 2007, will be able to transport up to 16 billion cubic meters of natural gas a year to the UK and will help to increase the country's security of supply. "These booking volumes will serve to further diversify our supplies to the UK and support our strategy of rigorous growth in Europe", Seele continued. To safeguard supplies, in summer 2004 the company purchased its first storage capacities in the UK.

At the beginning of 2004, WINGAS established the joint venture HydroWingas with the Norwegian company Norsk Hydro to market natural gas in the UK, and it is already supplying gas to several customers. HydroWingas is an independent company and will purchase its gas from the market, third parties or the owners. The core business is to sell natural gas direct to major industrial end customers as well as to regional suppliers.

WINGAS GmbH is a joint venture of Wintershall (65 %) and the Russian company OAO Gazprom (35 %). The two partners have both been active in the gas supply industry since 1990 and now supply natural gas to public utilities, major industrial enterprises and regional gas distribution companies in Germany and other European countries via their network of pipelines that is now more than 2,000 kilometres in length. So far Wintershall and Gazprom have invested about 3 billion euros in developing the WINGAS gas pipeline system. The network links the major gas reserves in Siberia with the growing markets in Western Europe and also provides WINGAS with access to the developing European spot markets. With its natural gas storage facility at Rehden, which has a working gas volume in excess of four billion cubic metres, WINGAS possesses about one fifth of the total storage capacity available in Germany. The natural gas storage facility at Rehden is the largest natural gas reservoir in Western Europe.

PI-04-12 - 12/21/04

Contact:
Stefan Leunig
Phone +49 561 301-3301
Fax +49 561 301-1321
press@wingas.de

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