Marathon Oil Corp. last week said it signed an agreement with BP Energy Co. to receive 58 Bcf of natural gas annually in the form of liquefied natural gas (LNG) for a minimum term of five years beginning in mid-2005.

The Houston-based energy company said it will take delivery of the LNG at El Paso Corp.’s Elba Island, GA, LNG terminal where the company holds rights to deliver and sell up to 58 Bcf of gas per year. Pricing of the LNG will be linked to a Henry Hub index, it noted.

“This supply agreement with BP will enable us to capture the full value of Marathon’s rights at Elba Island during the period of this agreement, while affording us the flexibility to commercialize other stranded gas resources in the longer term,” said Steve Lowden, Marathon’s senior vice president of business development and integrated gas.

Marathon acquired its rights to deliver and sell LNG at the Elba Island terminal in late 2002 for a period of up to 22 years, the company said. In 2004, the company has received three cargoes of LNG using its Elba Island delivery rights. Marathon said it is continuing to actively seek additional LNG cargoes prior to the start of deliveries from BP.

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