Equinor and RWE have signed a new five-year gas supply contract that would see it supply as much as 1.5bcm per year.
Announced on Monday, the agreement will see the Norwegian producer supply 10-15 terrawatt hours (TWh) – the equivalent of 1–1.5 billion cubic metres – of gas per year from now until 2028.
The contract is priced at market terms and the gas will be delivered at Germany’s virtual trading hub Trading Hub Europe (THE).
Equinor (OSE:EQNR) said the new bilateral agreement builds upon a “long-standing relationship” between it and RWE (RWE:Xetra).
“Germany and Norway have been energy partners ever since Norwegian gas exports first started more than 45 years ago. I am very pleased that we continue to develop this partnership and that we can announce another bilateral agreement between Equinor and RWE, which is one of many companies that see Norwegian gas as an enabler for energy security as well as of the energy transition,” said Equinor’s senior vice president for gas and power Helge Haugane.
It comes as industrial powerhouse Germany looks to shore up gas supplies following the severing of ties with major supplier Russia, following Moscow’s attack on Ukraine in 2022.
Meanwhile Norway has stepped in to attempt to address the gap in European supplies as other transition efforts progress.
Earlier this year the two companies announced plans to build hydrogen power plants, as well as pipelines to send gas and hydrogen south from Norway as part of the German-Norwegian Partnership on Climate, Renewable Energy and Green Industry.
Equinor said this week that its first step would to invest in and develop gas-fired power plants in Germany that are ready to use hydrogen as feedstock as soon as it becomes available on an industrial scale.
These plants are also subject to the power plant strategy announced by the German government, which aims to create a suitable regulatory framework for new gas-fired power plants.
Andree Stracke, CEO of RWE Supply & Trading added: “We are delighted to have signed a long-term gas supply agreement with our partner Equinor. For us as a global energy trader gas plays an important role in the energy transition.
“The newly concluded gas supply agreement adds a further important building block to our Pan-European natural gas portfolio contributing to security of supply.”
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