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Centrica has secured enough additional gas from Norway to heat 1.5mn British households this winter, as the UK races to find alternatives to Russian supplies.
The UK energy group, which is the country’s biggest supplier to homes, said on Thursday it had secured an agreement with Norwegian state-backed Equinor to deliver an additional 1bn cubic metres (bcm) of gas every winter for the next three years.
The deal will take total annual volumes delivered by Equinor to Centrica to 10 bcm, representing around 13 per cent of total annual gas consumption in the UK and further establishing Norway as the country’s primary source of gas supplies.
The agreement may also provide a measure of reassurance over UK gas and power supplies this winter. Analysts and academics fear a possible supply crunch across Europe if Russia cuts off gas to the continent entirely. Those fears were exacerbated this week after Russian state-owned Gazprom decided to reduce gas exports to Europe — a move that was denounced by Germany as “political”.
Centrica’s chief executive Chris O’Shea said the agreement with Equinor should “ease the pressure and provide some more certainty ahead of what may be a difficult winter” for the UK.
UK business secretary Kwasi Kwarteng said Centrica’s agreement with Equinor would “help underpin British energy security over the next few years, and also reinforce our partnership with Norway as a key international energy ally”.
UK ministers have been racing to buttress domestic energy supplies for the winter. Earlier this week, Kwarteng announced the West Burton A coal-fired power station in Nottinghamshire, owned by France’s EDF, would remain open this winter; it had originally been due to close in September. Centrica is also in negotiations with ministers to reopen Rough, Britain’s biggest gas storage site, which was effectively closed in 2017.
However, the government has also come under fire from trade unions and academics for leaving planning for the winter too late and allowing the 1 gigawatt Hinkley Point B nuclear plant in Somerset to close next month.
In 2021 the total amount of gas supplied by Norway to the UK as a whole reached 32 bcm, outstripping domestic supplies from the North Sea for the first time, according to trade body Offshore Energies UK, which represents domestic producers. Last year, the UK consumed 76 bcm of gas.
Centrica said earlier this year it was trying to extricate itself from a separate contract with Gazprom’s European trading and marketing arm following Russia’s invasion of Ukraine.
The UK government has said Russia accounted for around 4 per cent of the country’s gas supplies last year. But analysts argue this underplays the UK’s reliance on Russian gas given the country also receives 8 per cent of gas imports from the EU via undersea pipelines. The EU relies on Russia for 40 per cent of its own supply.
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