By Pietro Lombardi
MADRID (Reuters) - Spanish power utility Endesa faces a claim of $411 million as part of an arbitration process launched by a liquefied natural gas producer in March, it said on Tuesday.
"No provision has been made in this regard because we consider our counterparty's position totally unfounded," an Endesa spokesperson said, declining to identify the counterparty.
"In the course of the price review procedure for a long-term supply contract for liquefied natural gas, the counterparty, an LNG producing company, has initiated, in March 2023, an arbitration against Endesa Generación requesting a payment of approximately $411 million," the company said in its first-quarter earnings report published on Tuesday.
The issue arose in "an ordinary price review process as provided for in one of our long-term gas purchase contracts," the spokesperson said, adding that the parties had failed to reach an agreement, triggering the arbitration process.
Endesa, which is owned by Italian energy giant Enel (BIT:ENEI), expects the arbitration to be concluded in the first half of next year. Until then, the amount "could be subject to review based on market developments," it added.
Endesa considers that its provisions are enough to cover risks related to litigation, arbitration and claims.