Equinor and Centrica have signed an agreement which will see the Norwegian company deliver an additional 1 billion cubic metres (bcm) of gas supplies to the UK in time for this winter.
The new agreement adds to Equinor’s existing, bilateral contract with Centrica and brings the total volume under contract above 10 bcm per year – forming a “material” part of the UK’s typical yearly gas demand, the companies said.
The supply agreement will help bolster UK energy security over the coming three winters, with the additional volumes providing enough gas to heat an additional 4.5 million homes, Centrica said.
Equinor typically supplies 20-22 bcm of gas to the UK per year, or around 25% of national demand.
Last year the UK consumed 76bcm of gas, 32bcm of which was produced in Norway, according to Offshore Energies UK’s (OEUK) 2022 Business Outlook report. Around 29bcm of demand was produced domestically.
Equinor said the arrangement underlines the strategic importance of the Norwegian relationship to UK energy security.
It also comes as Centrica has applied to reopen Rough, the largest gas storage facility in Britain, which closed in 2017.
UK Business and Energy Secretary Kwasi Kwarteng said: “While we ramp up cheap renewables and accelerate British nuclear to boost our greater energy independence, we will still need natural gas for many decades to come.
“With Russia’s criminal invasion of Ukraine, it is more important than ever that we source more of the gas we need domestically, but also from safe and reliable import partners while we transition. We cannot, and will not, turn off the taps overnight.
“This major supply deal agreed today will help underpin British energy security over the next few years, and also reinforce our partnership with Norway as a key international energy ally.”
Equinor’s senior vice president Gas & Power, Helge Haugane, meanwhile, said the company was “proud to be a long-term, reliable energy partner with both Centrica and the UK.”
“In a period with a challenging geopolitical and macroeconomic environment with strong demand for natural gas, we at Equinor are doing what we can to export as much gas as possible to the market,” he continued.
Centrica chief executive Chris O’Shea said: “This agreement is good news for the country and for our customers. At a time where energy security is paramount, I’m delighted that we are able to do our bit to ease the pressure and provide some more certainty ahead of what may be a difficult winter.
“As Britain’s biggest energy supplier, through British Gas, we take our responsibility to securing supplies for over 8 million domestic and business customers very seriously. This important agreement with Equinor both underpins vital domestic supplies and strengthens the strategic relationship between the UK and Norway.”
GAS DEAL🇬🇧🇳🇴
Britain’s Centrica has signed a major deal with Norway’s Equinor, boosting UK supply for the next 3 winters.
With ongoing uncertainty in Europe, securing extra supply is welcome as we maximise gas production in British waters and accelerate nuclear and renewables. pic.twitter.com/izUK6pVNoQ
— Kwasi Kwarteng (@KwasiKwarteng) June 16, 2022
The move follows approvals by the Norwegian Ministry of Petroleum and Energy that will allow Equinor to increase streams from the Oseberg, Troll and Heidrun fields for export.
In total it would enable up to 2.4 bcm of additional flexible production from the fields, while some turnaround activity will also be postponed until later this year to sustain export volumes.
