The internal transfer price for natural gas is a volume weighted average price calculated at the end of every quarter.
- For the NCS production, the internal transfer price paid from Marketing, Processing and Renewables (MPR) to Development & Production Norway (DPN) consists of the following price components: Volumes sold under regular sales contracts or in the spot market are priced using a basket of relevant price markers which is reflecting Statoil’s sales structure. This is based on quotations at Title Transfer Facility (TTF) and National Balancing Point (NBP). Certain long term contracts are priced towards DPN using actual contract price and certain LNG volumes are priced at Henry Hub (HH) quotations.
- The internal transfer price is reported after deducting costs relating to bringing the gas from field of production to market and a marketing fee element.
* New formula as of 1 January 2008:
Up until fourth quarter of 2007 the internal transfer price for natural gas was calculated based on the average monthly oil price for the preceding six months of the relevant quarter. Effective from 1 January 2008 the transfer price formula for natural gas has been updated to better reflect fundamental changes in the markets for competing energies, i.e. crude oil, developments in natural gas markets and changes in the natural gas sales contracts portfolio.