Centrica and Equinor Secure UK Gas Supply with Multi-Billion Pound Deal
Centrica and Equinor enter a 10-year agreement worth over £20 billion to supply gas to the UK from 2025, covering 10% of Britain's demand. The deal highlights Britain's continued reliance on gas, despite climate goals, and includes a future transition option to hydrogen. Centrica seeks government support for gas storage.
Centrica, the parent company of British Gas, has finalized a decade-spanning contract with Norway's Equinor, valued at over £20 billion, to bolster the UK's gas supply starting in 2025. This strategic partnership cements Equinor's role in delivering five billion cubic metres of gas annually, fulfilling around 10% of the UK's gas consumption for ten years.
Although the UK government has prioritized reducing fossil fuel dependency to achieve climate objectives, gas still heats 70% of homes and powers a quarter of the electricity supply. Notably, this agreement reflects the shifting dynamics of European energy reliance, especially with Norway stepping in following reduced Russian gas flows post-Ukraine invasion in 2022.
The contract also opens avenues for transitioning from natural gas to hydrogen, showcasing future-forward energy strategies. Meanwhile, Centrica is lobbying the UK government for backing to keep its Rough gas storage site operational, which is critical for energy security but currently faces financial viability challenges.
(With inputs from agencies.)
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