Po Valley to Supply Nearly 28 Million Cubic Metres of Gas Under New Hera Contract

A Strategic Shift in Italy’s Gas Market

Po Valley Energy Limited (ASX – PVE) has announced a significant new chapter in its Italian operations with a fresh gas sales agreement (GSA) signed alongside its joint venture partners and Hera Trading S.r.l. This 12-month contract, commencing on 1 October 2025, will see Po Valley supply approximately 27.96 million standard cubic metres of natural gas from its Podere Maiar-1d well, located within the Selva Malvezzi production concession.

The deal replaces the current arrangement with BP Gas Marketing, which has been a reliable partner since the first gas flow in July 2023. While Po Valley expressed gratitude for BP’s professionalism and support, the competitive tender process ultimately favored Hera Trading, a local multi-utility powerhouse headquartered in the Bologna province and listed on Italy’s FTSE MIB index.

Local Partnership and Market Integration

Partnering with Hera Trading signals Po Valley’s intent to deepen its roots within the Italian energy landscape. Hera’s strong regional presence and multi-utility operations offer Po Valley a valuable platform to engage more closely with local stakeholders and communities. This alignment also dovetails with broader national goals of enhancing Italy’s energy independence, a priority in the context of Europe’s evolving energy dynamics.

The contract’s pricing mechanism is linked to the Italian Gas Index (IG INDEX GME), reflecting market-driven pricing based on day-ahead trades on the Italian Natural Gas Market. This linkage ensures transparency and responsiveness to market conditions, a critical factor for both supplier and buyer in a volatile energy environment.

Operational and Contractual Details

Under the agreement, Po Valley Operations Pty Limited (PVO) will act as operator, managing nominations, transportation costs, and revenue calculations. The contract includes standard termination rights and requires monthly, weekly, and daily supply nominations with a tolerance of plus or minus 10%. Payment terms stipulate settlement within 20 days after month-end, ensuring a smooth financial flow.

Since inception, the Podere Maiar-1d well has delivered around 54.4 million standard cubic metres of gas, with Po Valley holding a 63% interest in the joint venture. The new agreement’s estimated supply volume aligns with the company’s production capabilities and market strategy.

Looking Ahead

Po Valley’s Chairman and CEO, Kevin Bailey, highlighted the importance of this milestone, emphasizing the opportunity to contribute to Italy’s energy security while fostering local partnerships. The absence of an automatic contract extension means both parties will need to revisit terms before the agreement’s expiration in October 2026, leaving room for negotiation based on market and operational developments.