Russia is an important supplier of oil and gas. Several major economies plan to reduce their dependence on Russian hydrocarbons after the invasion of Ukraine.
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Norwegian Energy Firm equinox said on Thursday it would deliver additional gas to Britain Central Over the next three winters, as countries in Europe look to ramp up their supplies amid the ongoing war between Russia and Ukraine.
Equinor, in which the Norwegian state holds a 67% stake, said the new agreement would add about 1 billion cubic meters of gas per year to the existing bilateral contract with Centrica, the UK’s largest supplier of gas and electricity to consumers via British Gas. supplier.
Centrica said in its statement that it will now buy 10 bcm of gas annually from Equinor. “Against a difficult geopolitical and macroeconomic environment, this supply deal will provide further energy security for the UK,” it said.
“This new gas supply agreement will allow Equinor to deliver enough gas to heat an additional 4.5 million homes to Centrica over the coming three winters,” the company said.
With the cost of both, Russia’s invasion of Ukraine has put concerns regarding both the energy transition and energy security into sharp relief. Oil And the gas boom has continued in recent months.
On Thursday, Dutch TTF gas futures for July 2022 were trading at around €145 per megawatt hour, compared to €71.66 at the start of the year.
Russia is a significant supplier of both oil and gas, and several major economies have made plans in recent months to reduce their reliance on hydrocarbons.
The UK has previously said Russian imports represent less than 4% of its total gas supply in 2021, but the agreement between Equinor and Centrica highlights the importance of securing deals amid an environment of continued uncertainty and volatility.
In a video message tweeted on Thursday morning, The UK’s Trade and Energy Secretary, Kwasi Kvarteng, addressed the new reality many countries were facing after the conflict in Ukraine.
“When we look at Russia, we look at Ukraine, we look at gas demand, it’s extremely important to get imports from subject countries like Norway.”
Quarteng argued, the deal did not mean that “we are turning our backs on exciting new technologies like hydrogen from renewable energy. But it does mean that we will have the security of supply in a world where we will be on gas for many years.” Will depend. Come.”
Quarteng’s statement about relying on gas for the foreseeable future points to the heavy work major economies do when attempting to move away from an energy mix dominated by fossil fuels where renewables are in the majority.
In May, the European Commission – the executive branch of the European Union – detailed description About the EU’s plan to increase renewable energy capacity and reduce its reliance on Russian fossil fuels.
It simultaneously acknowledged that existing coal facilities could be used for “longer than initially expected”.
The situation is challenging. Russia was the largest supplier of both petroleum oil and natural gas to the EU last year, According to Eurostat.
And when it comes to finding common ground among the EU’s 27 members – the UK left the EU in 2020 – there is no easy solution on what to do about Russian gas.
Just last week, Hungarian Foreign Minister Peter Sizzarto ruled out the possibility of a Russian gas embargo in the next EU sanctions package, It would be “impossible” to say.