Germany's Sefe, Norway's Equinor strike $55 billion gas supply deal
BERLIN/FRANKFURT, Dec 19 (Reuters) - German energy firm Sefe secured a blockbuster 50-billion-euro ($55 billion) gas deal with Norway's Equinor on Tuesday, covering a third of the industrial gas needs of Europe's largest economy.
The deal marks a milestone in Berlin's efforts to replace former long-term supplier Russia, which first cut and later suspended deliveries via the Nord Stream pipeline in 2022, stoking fears of cold German homes during the last winter season.
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"This is a response to Europe's need for long-term, reliable supply of energy and a viable route to decarbonisation at scale," Equinor CEO Anders Opedal said.
The supply deal covers around 10 billion cubic metres (bcm) of natural gas per year from Jan. 1 2024 until 2034 and carries an option for another five years covering 29 bcm, the two companies said in a joint statement.
At current market prices, this translates into a contract volume of around 50 billion euros, Equinor said.
The agreement also covers a non-binding letter of intent that would make Sefe, formerly known as Gazprom Germania, an offtaker of low-carbon hydrogen from Equinor starting in 2029 and continuing towards 2060, the firms said.
Sefe - short for Securing Energy for Europe - was nationalised by Berlin during the continent's energy crisis and, along with Uniper, has been put in charge of securing the country's gas supply.
"The procurement of natural gas from the Norwegian continental shelf ensures the sustainable and future-proof supply for European and, in particular, German customers in the household and industrial sectors," Sefe CEO Egbert Laege said.
($1 = 0.9143 euros) (Reporting by Riham Alkousaa and Christoph Steitz; Editing by Madeline Chambers, Miranda Murray and Louise Heavens)