LNG

Dec 20 (LNGJ) - Norwegian pipeline gas company Equinor and German state-owned firm Securing Energy for Europe (SEFE), formerly a unit of Russia's Gazprom before it was nationalized by the German Federal Government after the Russian invasion of Ukraine, have signed a wide-ranging gas supply deal. Equinor has agreed to supply 111 terrawatt hours, or 10 billion cubic metres of natural gas per annum, to SEFE from January 2024 until 2034 and with an option for another five years and at terms reflecting market prices.

   “This is a response to Europe’s need for long-term, reliable supply of energy,” said Equinor’s Chief Executive Anders Opedal. “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,” said a joint statement. The agreements were signed in Berlin by CEO Opedal and SEFE’s CEO, Egbert Laege. “After the Troll gas sales agreement in 1986, this is one of the largest gas sales agreements Equinor has entered into as a company,” the Norwegians added.

Growing liquefied natural gas importer Germany has started following the UK in rolling back uneconomic goals for achieving Net Zero emissions by 2050 with the German coalition government agreeing to relax environmental codes for the construction industry to boost the economy and increase energy requirements.

Germany’s energy regulator, the Bundesnetzagentur, said there was sufficient natural gas in storage to see the nation through the winter gas season to the end of March and concentration was now fixed on the 2023-2024 gas season even as regular LNG have not yet started beyond commissioning activities at the ports of Wilhelmshaven and Lubmin.

The Trading Hub Europe (THE) GmbH of Germany has launched an invitation to bid for the provision of natural gas balancing services in the period from January 2023 through March 2023 to meet its long-term balancing requirements in the multi-quality German market area.

Germany, the leading European Union economy with plans for about half-a-dozen LNG import projects to replace halted Russian pipeline gas, has seen spot natural gas prices drop by over 55 percent since a government energy package was unveiled and the nation’s gas storage levels jumped to be almost full.

The Russian government said the Asia-Pacific region would likely largely replace Europe as a recipient of natural gas and petroleum in the wake of Western sanctions over Ukraine while European spot natural gas prices failed to move significantly higher in the wake of expected events.

Russian natural gas deliveries to Germany via the Nord Stream I pipeline, the main route for Russia’s gas exports to the European Union, will be temporarily halted again for three days on the night of Wednesday August 31.

The liquefied natural gas fleet increased liftings amid a vessel shortage to carry spot Asian volumes with cargo prices soaring over 20 percent in a week and European gas benchmark prices following suit on supply concerns.