E.ON Földgáz Trade Zrt, the Hungarian unit of E.ON Ruhrgas International, on Monday said it would offer 1.175 billion cubic meters of natural gas at auction on March 1.
The auction will be E.ON Földgáz's second. The starting price of the auction will be 95% of the weighted average cost of natural gas incurred by E.ON Földgáz. Deliveries will start on July 1, 2007, and the purchased amount will be delivered at a steady pace over two years. E.ON Földgáz will announce further details of the sale at a conference in early January, the announcement said.
The sale of the gas on the deregulated market was stipulated as a condition for the approval of E.ON's purchase of Mol Földgázellató Zrt by the European Commission, acting in its capacity as the EU's competition authority. E.ON must sell an annual 1 billion cubic meters of gas at internet-based auctions on the deregulated market for at least up to five years under the Commission's decision.
E.ON Földgáz held its first auction on May 4, 2006, when it sold 475 million cubic meters of gas to two companies. About 80% of the gas was to be delivered at Hungary's eastern border from a pipeline coming directly from Ukraine, and the delivery point of the rest was to be at the western border from a pipeline bringing gas through Austria.