OMV agreed on Friday to pay 905 million euros ($1 billion) to Russia’s Gazprom for a stake in a Siberian gas field, as part of the Austrian firm’s strategy to boost its gas business.

OMV Chief Executive Rainer Seele is banking on a sharp rise in demand for natural gas as a low-emission alternative to oil in power generation and heavy transport including trucks.

OMV’s planned purchase of 24.98% of the Achimov IV and V phase developments at the Urengoy gas field is also part in OMV’s strategy to focus production in low-cost countries.

The Austrian firm also said Gazprom would supply it with 1.2 billion cubic meters of liquefied natural gas (LNG) in 2020.

The companies plan to work together on conventional and small-scale LNG cargo projects and have agreed to “explore options for the joint development of small-scale LNG infrastructure projects,” OMV said.

“We have been receiving reliable gas supplies from Russia for more than 50 years, now we are extending our cooperation to LNG,” said Seele. “This will contribute to the diversification of sources of supply and help us safeguard security of supply in Europe.” OMV has a stake at the LNG terminal in Rotterdam, but that has not been a key focus for the company so far. Production at the Achimov blocks is forecast to start next year. In 2026, the fields are expected to generate more than 80,000 barrels of oil equivalent per day (boe/d).

OMV’s other Russian gas asset, a stake in the Yuzhno Russkoye field, currently delivers around 100,000 boe/d, but that is expected to decrease in coming years.

OMV produced 474,000 boe/d in the first quarter, more than 20 per cent of it in Russia. It has a production target of 600,000 boe/d by 2025.

OMV said its total investment in the Achimov blocks is expected to amount to 950 million euros up to the end of 2044.

Seele started negotiating access to the giant Urengoy gas field in 2015.

A year later, he signed an agreement to swap some of OMV’s Norwegian assets for the Achimov stake, but the plan fell through last year amid resistance from Norway and OMV decided to buy the stake.

The transaction still requires approval from OMV’s supervisory board, an agreement with Gazprom on the final documents, and regulatory approvals, OMV said. The deal is expected to be finalised by the end of this year.

Meanwhile, Barnes & Noble Inc said on Friday it would be bought by hedge fund Elliott Management Corp for $475.8 million, marking the end of the once-dominant US book retailer as a public company after years of falling sales.

Shares in the United States’ largest book-store chain closed up 30% on Thursday after reports of a potential deal surfaced, and rose another 11% early on Friday.

Listed on the New York Stock Exchange since 1993, Barnes & Noble has struggled to grow its business since the arrival of Amazon.com Inc turned the book sales market on its head.

Even the company’s recent efforts to pull in a more tech-savvy audience with its Nook e-book reader failed to compete with Amazon’s Kindle and other tablets.

Elliot’s offer of $6.50 per share, represented a premium of about 42% to Wednesday’s close, the day before media reports of a potential transaction first surfaced.

Barnes & Noble has been exploring options for a buyout since at least last October, with multiple parties showing interest including founder-chairman Leonard Riggio.

Riggio acquired the flagship Barnes & Noble trade name in 1970s, nearly a century after Charles Barnes started the business in his Illinois home.

Riggio grew the business, adding several retail stores across the country, but could not sustain the growth in a retail landscape dominated by Amazon.

In 2014, Barnes & Noble closed its New York Fifth Avenue store - once the world’s largest bookstore - and has faced declining sales for at least the last three years. As of this January, it ran 627 retail stores.

To help turnaround the company’s fortunes, Elliott is bringing in Chief Executive Officer of British bookshop chain Waterstones, James Daunt, to take the helm at Barnes & Noble.

Barnes & Noble said Waterstones, which was bought by Elliott last year, has successfully restored itself to sales growth and sustainable profitability under Daunt.

“Our investment in Barnes & Noble, following our investment last year in Waterstones, demonstrates our conviction that readers continue to value the experience of a great bookstore,” Paul Best, Elliott’s head of European Private Equity said.

Agencies