Equinor to provide long-term gas and hydrogen supplies for Europe

Germany’s state-owned energy company SEFE (Securing Energy for Europe) has entered an agreement with Norway-headquartered Equinor for long-term gas and hydrogen supplies.

Under the agreements SEFE is due to receive 111TWh (ca 10bcm) of natural gas per year – around one-third of German industrial demand – from 1 January 2024 until 2034, plus an option for another 5 years for a total of 319TWh (around 29bcm) over the period, at terms reflecting market prices.

In addition SEFE intends to become a long term off-taker of giga-scale, low carbon hydrogen supplies from Equinor with the ambition to start from 5TWh per year from 2029 and ramp stepwise up to 40TWh per year from 2050 towards 2060.

"By signing the agreements for gas and hydrogen supply, we have teamed up with a strong European supplier that brings us a big step closer to our common goal of decarbonising the energy sector while at the same time providing energy security,” said Dr Egbert Laege, CEO of SEFE.

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He adds that the natural gas procurement ensures sustainable and future-proof supply for European and, in particular, German customers in the household and industrial sectors, while the hydrogen supply should accelerate the development of the hydrogen economy, including joint business opportunities related to the transport and storage of hydrogen.

In this regard, SEFE Group's natural gas storage company Astora is considered as a potential key building block.

Equinor’s CEO Anders Opedal described the agreements as a response to Europe’s need for long-term, reliable supply of energy and a viable route to decarbonisation at scale.

“The total [natural gas] 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. I am also pleased to sign the letter of intent to explore opportunities to supply SEFE with low carbon hydrogen at industrial scale for decades to come, enabling European industries and flexible gas power plants to accelerate decarbonisation.”

The 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.