Germany's state-controlled firm Securing Energy for Europe (Sefe) and Equinor signed on Tuesday one of the biggest-ever natural supply deals for Norway's energy giant worth an estimated $55 billion (50 billion euros).
Equinor will supply Germany's Sefe with around 10 billion cubic meters (bcm) of natural gas per year from January 1, 2024 until 2034, plus an option for another 5 years, at terms reflecting market prices, the Norwegian major said.
The annual volumes are equivalent to one third of German industrial demand, Equinor noted, adding that "After the Troll gas sales agreement in 1986, this is one of the largest gas sales agreements Equinor has entered into as a company."
According to Reuters estimates, the deal would be worth $55 billion (50 billion euros) in total.
Sefe, wholly owned by the German government, was created last year after Germany saved a former Gazprom unit it had expropriated in April with a multi-billion-euro loan. Gazprom Germania was renamed Securing Energy for Europe GmbH (Sefe), to secure energy supply to Germany and Europe, the government said last summer.
"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," Equinor's chief executive Anders Opedal said in a statement.
Egbert Laege, CEO of Sefe, 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 natural gas will be delivered to Trading Hub Europe (THE) in Germany, Title Transfer Facility (TTF) in the Netherlands, and at the National Balancing Point (NBP) in the UK.
The deal signed today also includes a non-binding letter of intent for Sefe to become a long term off-taker of giga-scale, low-carbon hydrogen supplies from Equinor starting in 2029 and continuing towards 2060.
By Michael Kern for Oilprice.com
Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com, More
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