Norway's Equinor agrees to supply additional gas to UK under Centrica deal

Norway's state-controlled Equinor has agreed to supply an additional 1 Bcm/year to the UK under a new deal with UK utility Centrica, the companies said June 16.

The new supply agreement brings the total volume to be supplied by Equinor to Centrica to 10 Bcm/year. "The supply agreement will provide further energy security for the UK over the coming three winters," Equinor said.

Equinor said it typically supplied 20-22 Bcm of gas to the UK, enough to cover more than 25% of UK gas demand.

Centrica CEO Chris O'Shea said the new agreement would help boost UK gas supply security.

"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," O'Shea said.

The deal was also praised by UK Business Secretary Kwasi Kwarteng. "This major supply deal agreed today will help underpin British energy security over the next few years, and also reinforce our partnership with Norway as a key international energy ally," Kwarteng said.

"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," he said.

Concerns over Russian gas supplies to Europe have kept gas prices at sustained highs across the continent.

The TTF front-month contract was last assessed on June 15 at Eur114/MWh, down from record highs reached in March, but still 300% higher year on year, according to Platts assessments by S&P Global Commodity Insights.

Prices surged on June 15 after Russia's Gazprom signaled a further cut in gas flows to Germany via the Nord Stream pipeline.