Equinor, Centrica Sign $27 Billion Gas Sales Deal

Equinor announced, in a statement posted on its site on Thursday, that it and Centrica have signed a long-term gas sales agreement.

The deal is for 55 terawatt hours (TWh) of natural gas per year, or around five billion cubic meters, for a period of 10 years, Equinor outlined in the release, adding that it starts on October 1 “at terms reflecting market prices”.

The total contract value would be around GBP 20 billion ($27 billion) assuming current prices, Equinor noted in the statement.

“I am very pleased to strengthen the energy partnership with the UK and our longstanding partner and customer Centrica,” Equinor President and CEO Anders Opedal said in the statement.

“This agreement will continue to support the UK’s energy security with reliable gas supplies from the Norwegian continental shelf,” he added.

“The flexibility that natural gas offers will play a key role in enabling further development of renewable power and decarbonization in the UK”, Opedal went on to state.

Equinor UK Country Manager Alex Grant said in the statement, “the UK and the North Sea is a core area in our long-term ambitions to remain a supplier of reliable energy and to help decarbonize societies and industries”.

“The new gas sales agreement with Centrica will be a key element in this. Energy security and decarbonization must go hand in hand, and I am proud that Equinor is actively delivering both,” Grant added.

A release sent to Rigzone yesterday by the Centrica team confirmed the agreement, noting that the new deal will see Centrica take delivery of five billion cubic meters of gas per year to 2035.

That release said the “expansive ten-year deal continues a long-term relationship with Equinor that dates back to 2005, bringing gas from Norway to the UK”. It added that the contract also allows for natural gas sales to be replaced with hydrogen in the future, “providing further support to the UK’s hydrogen economy”.

In this release, Chris O’Shea, Group Chief Executive of Centrica, said, “Equinor is a valued partner, and this landmark agreement underscores the vital role that natural gas plays as a transition fuel as we navigate towards a low carbon energy future”.

“The enduring partnership between Centrica and Equinor exemplifies the strong and strategic relationship between the UK and Norway and I’m immensely proud that we’ve agreed this deal,” he added.

“Over the last few years, we’ve seen first-hand how important energy security is. Today’s deal not only ensures the UK’s energy security has improved but also paves the way for a burgeoning hydrogen market,” he continued.

“The deal represents a significant investment in the UK’s future, showing that Centrica will make bold investments that drive forward the energy transition while delivering value for our shareholders,” O’Shea went on to state.

In its statement, Equinor noted that, for nearly 50 years, the company and its partners “have developed the Norwegian Continental Shelf to be the largest and most reliable provider of energy to Europe”.

In a statement posted on its site back in January, Equinor announced “the highest natural gas production ever from a Norwegian field”.

The company said in that statement that, in 2024, the Troll field in the North Sea produced more gas than ever before, adding that, “at the same time, CO2 emissions were significantly reduced”.

“The Troll field in the North Sea has set a historic production record, delivering 42.5 billion standard cubic meters of natural gas in 2024,” Equinor said at the time.

“This is the highest annual production ever for the field and is an increase of almost ten percent from the previous record from 2022 (38.8 billion standard cubic meters),” it added.

To contact the author, email andreas.exarheas@rigzone.com