ENGIE agrees to take all DNO’s North Sea gas for four years

DNO’s Norwegian operating subsidiaries have entered an offtake agreement with French utility ENGIE for DNO’s Norwegian offshore gas production.

The agreement covers the company’s entire Norwegian gas production following its acquisition of Sval Energi Group, and it will run for four years from Oct. 1, 2025.

In connection with the transaction, DNO has arranged an offtake financing facility with a US bank for up to $500 million, under which the bank will pay the company the value of up to 270 days of scheduled gas production based on future gas sales receivable, at a favorable interest rate and with no charges for undrawn amounts.

Proceeds from the offtake facility will replace Sval Energi’s similar existing facilities, and it will also be used for general corporate purposes.

“We have received strong interest by buyers to pre-purchase our enlarged North Sea production of 80,000 boe/d, split about equally between oil and gas," said DNO’s executive chairman Bijan Mossavar-Rahmani. “These three-way transactions are made possible because buyers are eager to lock in secure supplies of Norwegian oil and gas, and US banks, in particular, have significantly stepped up fossil fuel lending."

DNO is also in talks on establishing an offtake agreement and related financing facility on comparable terms for its North Sea oil production.