Centrica strikes £20 billion gas supply deal with Equinor

British Gas owner Centrica has announced a roughly £20 billion partnership deal with energy giant Equinor to bring gas to the UK.

The firms said the new deal will see Centrica take delivery of five billion cubic metres of gas per year up to 2035.

Chris O’Shea, boss of Centrica, said the deal ensures an improvement in UK energy security and stressed that the business is working with the Government to build further gas storage.

It comes ahead of a speech from the boss of the Confederation of British Industry, who is calling on the Government to come up with a “serious plan” to cut energy costs and invest in energy security.

Rain Newton-Smith, chief executive of the business group, will say that Britain must address soaring energy tariffs as firms struggle under the weight of crippling power bills on top of tax and wage hikes, in a speech later on Thursday.

Around half of all UK gas was imported from Norway last year, after a recent increase in demand following the Russian invasion of Ukraine.

Centrica added that the contract will also call for natural gas sales to be replaced with hydrogen in the future.

Mr O’Shea said: “Equinor is a valued partner and this landmark agreement underscores the vital role that natural gas plays as a transition fuel as we navigate towards a low carbon energy future.

“Over the last few years, we’ve seen first-hand how important energy security is.

“Today’s deal not only ensures the UK’s energy security has improved but also paves the way for a burgeoning hydrogen market.

“The deal represents a significant investment in the UK’s future, showing that Centrica will make bold investments that drive forward the energy transition while delivering value for our shareholders.”

Equinor’s president and chief executive Anders Opedal said: “For nearly 50 years, we have supported the UK’s energy security with reliable gas supplies.

“In addition, we have advanced offshore wind and pioneered decarbonisation solutions.

“We are pleased to strengthen the energy partnership further through a new gas sales agreement with our longstanding customer and partner Centrica.”