DONG loses million dollar dispute to Maersk
DONG Energy stands to pay back millions of dollars to A.P. Moeller-Maersk.
The state-owned energy company has overcharged Maersk for transporting natural gas, according to a verdict that has not yet been made public and which upholds the Danish Energy Agency's verdict from October 2012.
Maersk Energy Markets (MEMAS), which trades gas, amonger things, has seen its complaint upheld, namely that DONG's tariffs are too high, and the Danish Energy Appeal - the final appeals authority before a case goes to the court - has ruled that the tariffs should be lowered by USD 0.01, to between USD 0.009 and USD 0.012.
It now up to the Danish Energy Agency to determine the exact rate, but the verdict means that DONG stands to lose more than USD 18 million a year.
MEMAS filed a complaint about the price rate in a specific signed contract, but the verdict also means that the prices must be lowered in future contracts.
"The Danish Energy Agency's ruling on October 30th 2012 is summoned for renewed treatment, for the agency to determine an exact price in the interval USD 0.009 to USD 0.012 per cubic meter for services related to transport contracts between DONG and MEMAS signed in the period from July 2011 to October 2012. Furthermore, the Danish Energy Agency's ruling on October 30th 2012 is upheld," says the Energy Appeal in its ruling.
USD 27.2 - 45.4 million a year
Even though the case concerns minuscule sums the energy company stands to lose many millions of dollars, and gas traders including Maersk can look forward to major savings.
In 2011, five billion cubic meters of gas were transported through the upstream pipes in the North Sea, a majority of which are owned by DONG.
"This decision will not only impact transport contracts between DONG Naturgas and Maersk Energy Marketing, it will also influence the price rate of future contracts related to transporting natural gas to the Danish market, as other energy companies can make claim to the same fair price rate when entering agreements for transporting natural gas to the Danish market," said the Danish Energy Agency in its ruling on October 30th 2012, a ruling that has now been upheld.
The Energy Appeal reached its decision yesterday, Monday, October 7th 2013.
Due to the principle nature of the case the decision was treated by a board of seven people. This marks the first time that the Energy Agency - and the Energy Appeal - has made a ruling concerning fair price levels related to transporting gas in the upstream pipe system.
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