Azernews.Az

ROME – Edison SpA, Italy’s second-largest power generator, will renegotiate natural-gas supply contracts next year and agree the purchase of fuel from Azerbaijan, Chief Executive Officer Umberto Quadrino said, Bloomberg reported.

"Our main goal is the renegotiation of gas procurement contracts which will take place throughout the year, some right away, others later because negotiations are not something to be rushed," Quadrino said in a telephone interview. "Once we have a deal our results will see a sharp improvement."

The Milan-based company, which uses gas in power generation and supplies it direct to customers, posted a 54 percent decline in third-quarter profit because of supply deals signed when oil prices were higher. Edison’s suppliers include Russia, Algeria, Libya, Norway and Qatar and European gas contracts are typically linked to crude prices. Quadrino said changing the terms of existing gas supply contracts and agreeing purchases from Azerbaijan will set the scene for growth next year.

Negotiations for about 10 billion cubic meters of gas a year from Azerbaijan are taking place in the next few days and will likely lead to an accord by June, Quadrino said.

Energy companies want gas from the Caspian region to reduce dependence on Russian supplies. Edison, Greek natural gas supplier Depa SA and Ankara-based Botas are behind the Interconnection Turkey Greece Italy, or ITGI, pipeline project designed to bring Azeri gas to Europe through Turkey and Greece.

Edison, which recently reached the 1 million customer mark, will continue to work on increasing clients in 2011 and plans to achieve its goals of 2 million clients by 2012 and 3 million by 2014, Quadrino said.

"There are 28 million families in Italy, there is enormous potential to wean them away from the old monopolist," he said, referring to Enel SpA. "Growth in electricity demand is slow but we need to remember there was a 6 percent slump in 2009. We’ll likely have 1.5 percent growth in 2010 and between 1 percent and 1.5 percent next year."

Edison has 12,300 megawatts of power generation capacity, including 28 gas-fired plants, and produced about 15 percent of Italy’s power last year, according to the company.