Centrica and Equinor have today announced a major agreement to deliver an additional 1 billion cubic meters (bcm) of gas supplies to the UK for each of the next three winters. Against a difficult geopolitical and macroeconomic environment, this supply deal will provide further energy security for the UK.
This new gas supply agreement will see Equinor deliver to Centrica sufficient gas over the coming three winters to heat an additional 4.5 million homes. Centrica will now buy a total of 10 bcm of gas per year from Equinor, a material part of the UK’s typical yearly gas demand. With Britain currently importing around a third of its gas requirements from Norway, the announcement underlines the strategic importance of the Norwegian relationship to UK energy security.
Centrica, the UK’s largest supplier of electricity and gas to consumers through its British Gas business, has been working with suppliers and the UK government to underpin the UK’s energy needs.
This includes zero carbon electricity supplied from its interest in the UK nuclear generation fleet and long term power purchase agreements with renewable electricity generators, and gas supplied through its own UK gas production business, long term gas supply contracts importing gas principally from Norway, and through its global LNG business.
Chris O’Shea, Centrica Group Chief Executive, said:
‘‘This agreement is good news for our customers and the country. At a time when energy security is paramount, I’m pleased 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 gas and electricity supplier we take our responsibility to over 8 million British Gas domestic and business customers very seriously. This important agreement with Equinor underpins vital domestic supplies and strengthens the strategic relationship between the UK and Norway.’’
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.”
Helge Haugane, Senior Vice President Gas & Power, Equinor, said:
“Equinor is proud to be a long-term energy partner with the UK and Centrica, and I am very happy that through this agreement we are able to contribute to securing further energy supply for the coming winters. With these new volumes our long-term, bilateral contract with Centrica will be above 10 billion cubic meters of gas per year.
“We are committed to further strengthen the strategic relationship with Centrica and the UK, both in supplying oil and gas and by playing a leading role in delivering on the UK’s decarbonisation ambitions.”
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