Statoil & Centrica Sign Major Gas Sales Agreement
Statoil and Centrica have entered into a long term gas sales agreement for the delivery of 5 billion cu. m per year to the UK market from 2015 to 2025 . “The agreement demon-strates that natural gas is set to play an important role in the UK’s long term energy mix”, says Statoil’s president and CEO Helge Lund (right). “Natural gas has all the features needed for the UK to reach its long term energy policy goals of affordability, security of supply and carbon dioxide emissions reduction.”
This new long term gas sales agreement follows an existing agreement between Statoil and Centrica that expires in 2015. “Today’s announcement is of high strategic importance as two of the UK’s key energy players are taking on long-term commitments in order to contribute to UK’s energy security. The agreement also shows the competitiveness of Statoil’s natural gas portfolio on the NCS”, says Helge Lund.
Sam Laidlaw (left), chief executive, Centrica says: “Today’s announcement represents a significant milestone for the UK and for Centrica as we help deliver energy security for our customers long into the future. The 10-year supply agreement further strengthens our partnership with Statoil and links one of the world’s largest gas exporters and one of the world’s largest gas markets.”
UK – Norway Partnership
UK prime minister David Cameron says: “I warmly welcome this announcement, which underlines the strength and depth of the partnership that the UK & Norway enjoy. Gas plays a central role in powering our economy, and will continue to do so for decades to come. Today’s agreement will help to ensure the continued security and competitiveness of gas supplies to Britain, from a trusted and reliable neighbour.”
Chris Huhne, UK secretary of state for Energy and Climate Change, says: “This is good news for Britain. Today gas powers almost half of our electricity, and nearly 70% of our heating. It is reliable, flexible and competitive, and helps power our economy. Gas has a long term role to play in keeping our lights on and our homes warm, as part of an increasingly low carbon energy portfolio. This agreement will help to deliver that gas securely and cheaply, and further enhance our close relationship with Norway.”
Substantial
5 billion cu. m per year is a substantial volume, it represents approximately 5% of the total gas consumption in the UK, and corresponds to the gas consumption of 3.5 million UK homes or the gas needed to fuel nine to ten 400MW gas power plants. The UK market consumes around 98 bcm per year and is the largest and most liquid gas market in Europe. The gas under the contract is linked to indices at the National Balancing Point (NBP), the virtual price setting point in the UK gas market. The volumes will be delivered through existing pipeline infrastructure from the Norwegian Continental Shelf.
Picture courtesy of Harald Pettersen/Statoil.