<p>As part of the non-exclusive partnership, Sonatrach will provide up to 2bcm of natural gas per year over a long-term period. Part of this capacity will go to Energias de Portugal (EDP), while the remainder will be used to operate new combined cycle gas turbine (CCGT) projects that will be established by the partnership. <br /><br />In addition, the companies are to set up a joint venture to market natural gas, while Sonatrach will participate as a minority stakeholder, with at least 25% interest, in power generation companies that will develop new CCGT projects. These turbines will be run on gas supplied by Sonatrach. <br /><br />EDP has said that the companies may also agree to additional partnership components, including mid-stream gas business ventures. EDP commented that the partnership will build on the company's aims to develop an integrated natural gas strategy, as well as the construction of the new CCGT power generation projects in Iberia, Spain. <br /><br />As part of the preliminary understanding, Sonatrach has acquired 1,639,699 EDP shares, bringing its total interest in the Portuguese utility to 2.035%. EDP reported that the shareholding now held by Sonatrach represents 2.039% of the company's voting rights. <br /><br />The joint venture is subject to a number of agreements that will be negotiated by July 31, 2007.<br /><br />According to AFX International Focus, industry analysts believe that the deal will significantly reduce EDP's exposure to unstable gas prices looking forward, as it will secure the Portuguese utility's gas supply over a long-term period.</p>
