Germany secures more Norwegian gas, as Equinor and RWE pen five-year supply agreement
Norwegian state-owned energy giant Equinor has inked a new supply agreement for natural gas with Germany’s RWE, which is expected to aid in bolstering the country’s energy security. This long-term deal builds upon the long-standing relationship between the two energy players and strengthens ties between Germany and Norway.
According to Equinor, the agreement with RWE is signed for five years, starting in October 2023, with volumes of between 10 to 15 TWh per year, equivalent to around 1 – 1.5 billion cubic meters (bcm) of natural 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).
Helge Haugane, Equinor’s Senior Vice President Gas & Power, commented: “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.”
Earlier this year, RWE and Equinor disclosed a plan to develop large-scale value chains to ensure the security of supply and reduce emissions in response to the German-Norwegian Partnership on Climate, Renewable Energy and Green Industry. The first step is 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 in the country.
Furthermore, 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. The key elements in the value chain will be exports of low-carbon hydrogen from Norway to Germany, which could help speed up the development of a hydrogen economy. In addition, green hydrogen will be gradually produced using power from wind farms along the pipeline route.
Andree Stracke, CEO of RWE Supply & Trading, remarked: “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.”
This deal with RWE comes only days after Equinor and Vår Energi approved concept selection (DG2) for gas export from the Goliat oil and gas field to the Snøhvit pipeline for further transport to Hammerfest LNG.