Equinor signed long-term agreements with Germany's state-owned energy company Securing Energy for Europe (SEFE) to supply natural gas and and pursue large scale hydrogen supplies, Equinor announced on Tuesday.
As part of the agreements, Equinor will supply SEFE with 111 terrawatt hours (TWh) of natural gas per year, around 10 billion cubic meters (bcm), which is equivalent to one third of German industrial demand.
The deal covers the period between Jan. 1 2024 and 2034 and subject to extension for another 5 years at terms reflecting market prices.
The 5-year extension option is for a total of 319 TWh, or around 29 bcm, over the period.
The companies also signed a non-binding letter of intent which allows SEFE to become a long term off-taker of giga-scale, low-carbon hydrogen supplies from Equinor starting in 2029 and continuing towards 2060.
The supply of low-carbon hydrogen to SEFE at industrial scale is planned to start from 5 TWh per year from 2029 and ramp it up stepwise to 40 TWh per year from 2050 towards 2060.
“This is a response to Europe’s need for long-term, reliable supply of energy and a viable route to decarbonization at scale”, Equinor’s CEO Anders Opedal, was quoted as saying in the statement.
He recalled Equinor and Germany’s strong energy partnership since the start of Norwegian gas exports in 1977.
“The total volumes we have agreed make this one of the largest agreements we have made as a company, and the supplies will contribute to energy security for Germany and Europe,” Opedal added.
SEFE’s CEO Egbert Laege, for his part, said 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.”
The agreement is the largest gas sales agreement Equinor has entered into as a company after the Troll gas sales agreement in 1986.
By Sibel Morrow
Anadolu Agency
energy@aa.com.tr