One billion more cubic meters of gas will enter the UK market for each of the next three winters, after energy giants Centrica and Equinor announced a major gas delivery agreement today.
Equinor is now set to deliver enough gas to Centrica over the coming three years to heat an additional 4.5m homes.
Centrica will now buy a total of 10 billion cubic meters of gas per year from Norwegian giant Equinor – a hefty chunk of the UK’s typical yearly gas demand.
Currently, the UK is importing around a third of its gas requirements from Norway, with the country becoming increasingly significant in UK plans to ensure the security of supplies.
Centrica is the largest supplier of electricity and gas in the UK, serving nine million customers through its British Gas business.
Chris O’Shea, Centrica Group’s 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.”
Helge Haugane, Senior Vice President Gas and Power, Equinor, added: “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.”
The government also commented on the deal, with Business and Energy Secretary Kwasi Kwarteng defending the role of natural gas in the UK’s energy mix.
He 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.
Energy bills are expected to spike again this winter, with Ofgem boss Jonathan Brearley warning the consumer price cap is likely to rise to nearly £2,800 per year.
The government has announced a £15bn support package – which could offer vulnerable households up to £1,200 per year off their bills – and is also looking to ramp up supply security through domestic renewable and fossil fuel energy generation.
City A.M. understands Centrica is one of three suppliers currently in the race to sign Bulb Energy, which remains in special administration.