The British energy giant Centrica, the owner of British Energy, concluded a long -term substantial agreement with the Norwegian energy company Equinor.
The contract, covering a decade, implies the supply of natural gas from the Equinor to Centrica and is estimated at more than 20 billion British pounds, equivalent to around 27.07 billion dollars in US dollars.
This important agreement, confirmed by the two companies on Thursday, ensures a critical energy supply for Centrica and highlights the strategic energy partnerships in progress between the United Kingdom and Norway.
The substantial financial commitment underlines the importance of this supply of supply in the current energy landscape.
The president and chief executive officer of Equinor, Anders Opedal, said in a press release:
The flexibility offered by natural gas will play a key role in allowing the development of renewable power and decarbonization in the United Kingdom.
Reduce gas dependence
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The United Kingdom is currently making a concerted effort to reduce its dependence on natural gas, driven by ambitious climatic targets and a commitment to environmental sustainability.
However, this company is faced with significant challenges due to the country’s existing energy infrastructure.
Currently, a substantial majority, around 70%, of British households are on gas for heating, making it a main source of residential energy.
In addition, gas power plants play a vital role in the country’s electricity production, representing around 25% of the total electricity supply.
This generalized dependence on gas has a formidable obstacle in the transition from the United Kingdom to cleaner and more sustainable energy sources, requiring substantial investment and infrastructure changes.
CEO of Centrica, Chris O’Shea, said in a press release:
This historical agreement underlines the vital role that natural gas plays as transition fuel while we sail towards an energy future with low carbon content.
The agreement
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Equinor obtained the long-term agreement to provide the United Kingdom with a substantial volume of natural gas.
Under this agreement, Equinor will provide five billion cubic meters (BCM) of natural gas each year.
This supply commitment should remain in force until 2035, ensuring a coherent and reliable source of energy for the United Kingdom over an extended period.
The annual offer of the five BCMs is a significant figure, representing approximately eight percent of the total gas demand for the entire United Kingdom.
This agreement offers flexibility for future energy transitions, allowing the substitution of natural gas sales by hydrogen if necessary.
Decrease in fossil fuel production
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Great Britain has experienced a significant decrease in the production of fossil fuels in the North Sea since its peak in the late 1990s. In accordance with their climatic objectives, the Labor government has announced that it would cease to issue new petroleum and gas licenses.
Great Britain has met almost two thirds of its gas needs through imports the previous year, Norway providing 50% of these imports.
In the midst of European supply problems triggered by the invasion of Ukraine by Russia and the considerable reduction in Russian gas flows, Centrica obtained an agreement with the equine in June 2022. This agreement guaranteed additional gas deliveries for the following three winters.
Centrica has established liquefied natural gas agreements with several international energy companies, including Coterra Energy and Delfin Midstream in the United States, as well as Petrobras of Brazil.
