Gazprom Loses Out to Novatek for E.ON Russia Supply

E.ON Russia's Board of Directors have approved a deal that will see Novatek supply gas to four of E.ON Russia's five power stations.

The deal, the financial terms of which have not yet been released, will see Novatek provide gas to the Smolenskaya, Surgutskaya, Shaturskaya and Yaivinskaya facilities from 2013 until 2027. The deal will replace one currently in place with Gazprom, which is set to expire at the end of this year.

Speaking to Reuters news agency, a spokeswoman for E.ON Russia said that the company had decided to switch suppliers due to more favourable conditions offered by Novatek.

"The contracts with Gazprom expire in the end-2012," Anna Martynova told the news agency. "We have been in talks over future supplies. Novatek offered better terms."

A statement from E.ON Russia also said that the Board has approved a change in the terms and conditions of previously signed contracts with Novatek.