by Riham Alkousaa and Christoph Steitz
BERLIN/FRANKFURT (Reuters) – German energy company Sefe and Norway’s Equinor signed a 50 billion euro long-term supply deal on Tuesday that covers around a third of Germany’s natural gas needs for energy production. industry over the next decade.
The deal marks a major step in Berlin’s efforts to replace natural gas supplied by Russia, which was by far its largest supplier before the invasion of Ukraine in February 2022.
“This is a response to Europe’s need for a reliable, long-term energy supply, and a viable way to achieve large-scale decarbonization (of industry)” to combat climate change, said Anders Opedal, CEO of Equinor.
The agreement covers approximately 10 billion cubic meters of natural gas per year from January 1, 2024 to 2034 and includes an additional five-year option covering 29 billion cubic meters, the two companies said in a joint statement.
At current market prices, this represents an amount of around 50 billion euros, Equinor said.
The deal also includes a non-binding letter of intent that would make Sefe a buyer of low-carbon hydrogen starting in 2029 and lasting through 2060, the companies said.
Sefe, formerly known as Gazprom Germany, was bailed out and nationalized by Berlin during the energy crisis caused by the war in Ukraine. Sefe and Uniper have been tasked by the German government with securing the country’s gas supply.
“The gas reserves of the Norwegian continental shelf guarantee a sustainable and secure supply for European customers and, in particular, German industrial and private customers,” said Egbert Laege, CEO of Sefe.
(Written by Riham Alkousaa and Christoph Steitz; French version Tangi Salaün, edited by Blandine Hénault)
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