£20 billion gas deal gives UK’s energy security a shot in the arm

Norway’s state-owned energy giant Equinor has inked a multi-year gas sales agreement with Britain’s Centrica, which is expected to strengthen energy security in the United Kingdom (UK).

The ten-year contract, with a total value of around £20 billion (about $27.14 billion) based on current prices, will see Equinor provide Centrica with 55 TWh of natural gas per year, or around 5 billion cubic meters (bcm), starting from October 2025 at terms reflecting market prices. The UK currently imports nearly 2/3 of its gas requirements from Norway, with Equinor being the major supplier.

Chris O’Shea, Group Chief Executive of Centrica, emphasized: “Equinor is a valued partner, and this landmark agreement underscores the vital role that natural gas plays as a transition fuel as we navigate towards a low carbon energy future. The enduring partnership between Centrica and Equinor exemplifies the strong and strategic relationship between the UK and Norway.”

The Norwegian giant claims that annual volumes under this agreement will cover nearly 10% of total annual UK gas demand, which is interpreted to make the deal among the largest in the firm’s bilateral portfolio.

O’Shea added: “Over the last few years, we’ve seen first-hand how important energy security is. Today’s deal not only ensures the UK’s energy security has improved but also paves the way for a burgeoning hydrogen market. The deal represents a significant investment in the UK’s future, showing that Centrica will make bold investments that drive forward the energy transition while delivering value for our shareholders.

“We will continue to focus on further improving energy security by working with the UK government to ensure the right levels of gas storage are in place to complement this landmark gas importation agreement.”

Aside from investing in the UK’s oil and gas production, Equinor already operates three offshore wind farms at Sheringham Shoal, Dudgeon, and Hywind Scotland, the world’s first floating offshore wind farm.

Anders Opedal, Equinor’s President and CEO, commented: “This agreement will continue to support the UK’s energy security with reliable gas supplies from the Norwegian Continental Shelf. The flexibility that natural gas offers will play a key role in enabling further development of renewable power and decarbonisation in the UK.”

Furthermore, Dogger Bank, which is under development, is set to be the world’s largest offshore wind farm once completed. Together with partners, the Norwegian player is also developing the UK’s first CO2 transport and storage project and a gas power plant with CO2 capture.

Alex Grant, Equinor’s UK Country Manager, remarked: “The UK and the North Sea is a core area in our long-term ambitions to remain a supplier of reliable energy and to help decarbonise societies and industries.

“The new gas sales agreement with Centrica will be a key element in this. Energy security and decarbonisation must go hand in hand, and I am proud that Equinor is actively delivering both.”