Germany and Norway’s Equinor strike €50bn gas supply deal

Berlin/Frankfurt — German energy firm Sefe secured a blockbuster €50bn gas deal with Norway’s Equinor on Tuesday, covering a third of the industrial gas needs of Europe’s largest economy. 

The deal is a milestone in Berlin’s efforts to replace former long-term supplier Russia, which first cut and then suspended deliveries via the Nord Stream pipeline in 2022, stoking fear of cold German homes.

“This is a response to Europe’s need for long-term, reliable supply of energy and a viable route to decarbonisation at scale,” said Equinor CEO Anders Opedal.

The supply deal covers about 10-billion cubic metres (bcm) of natural gas a year from January 1 2024 until 2034 and carries an option for another five years covering 29 bcm, the two companies said in a joint statement.

At today’s market prices, this translates into a contract volume of about €50bn, said Equinor.

The agreement also covers a nonbinding letter of intent that would make Sefe, formerly known as Gazprom Germania, an offtaker of low-carbon hydrogen from Equinor starting in 2029 and continuing towards 2060, said the firms.

Sefe, short for Securing Energy for Europe, was nationalised by Berlin during the continent’s energy crisis and, along with Uniper, was put in charge of securing the country's gas supply.

“The procurement of natural gas from the Norwegian continental shelf ensures the sustainable and future-proof supply for European and, in particular, German customers in the household and industrial sectors,” said Sefe CEO Egbert Laege.

Reuters