The Government is continuing to chase long-term gas deals with Norway, as it looks to ramp up supply security and ensure the lights stay on this winter.
Prime Minister Liz Truss confirmed ministers are “looking” at multi-year deals to reduce its reliance on imports from authoritarian regimes.
She said: “I have not signed any deal. But what I’m saying is that Britain’s energy security is vital and what we will be doing is always looking for value for money, of course we will, but it’s important that we have that long-term energy security.”
Truss pledged to bring down debt after being challenged on whether it was wise to borrow money to sign import deals that lock in current record prices.
However, she refused to comment on whether deals with Norway would lock in prices at currently historically high levels.
The Prime Minister said she was “making sure we’ve got a good price” while also highlighting that “energy security is vitally important.”
She said: “We never want to be in a position again where we’re dependent on authoritarian regimes for our energy. That’s why we’re in the situation we are now.”
Gas deal to bolster supplies before winter crisis
The National Grid is set to publish its winter outlook later this week, which will outline whether the UK will have sufficient supplies to meet its energy needs over the coldest months of the year.
Its early forecast, published in July, suggested it would stave off supply shortages but this was based on extra supplies being available from Europe via interconnectors.
Since then, Ofgem has warned there is a significant risk of gas shortages due to the war in Ukraine.
The European Union has managed to ramp up storage levels to 90 per cent capacity ahead of winter, which has contributed to tumbling gas prices in recent weeks.
However, if Russia turns off the taps into Europe, the International Energy Agency (IEA) has predicted there could a supply crunch as soon as next February.
German Chancellor Olaf Scholz and French President Emmanuel Macron met earlier this week to discuss Europe’s energy strategy this winter.
The UK has pledged to phase out Russian oil and coal imports, and was only dependent on the country for around four per cent of its gas supplies prior to its invasion of Ukraine.
Instead, the UK relies on Norway for the majority of its overseas supplies, with around 52 per cent of all the UK’s gas imports coming from Norway in the second quarter of 2022.
The second highest was Qatar, which supplied less than nine per cent of the imports.
If Europe is shut off from Russian supplies, these markets will become considerably more competitive for the UK in the scramble for energy supplies.