In an agreement which moves the country further away from its recent historic dependence on Russian gas, German energy firm Sefe and Norway’s Equinor have sealed a long-term supply deal.
The package will provide Europe’s Germany with some 10 billion cubic metres of natural gas per year for the next decade.
Germany previously imported around half of its gas from Russia and more than a third of its oil.
However, following reaction to its invasion of Ukraine, Russia cut off the country’s gas supply in August 2022, while Germany halted Russian oil imports at the start of the year.
In its attempt to locate alternate sources of energy rapidly, Germany has since reopened coal-fired power plants, delayed plans to shut down its three remaining nuclear power plants, and pushed to increase capacity to store natural gas imported from other countries such as Norway and the US.
“This is a response to Europe’s need for long-term, reliable supply of energy and a viable route to decarbonization at scale,” Equinor CEO Anders Opedal said.
The supply deal runs from 1 Jan 2024 until 2034 and carries an option for another five years at market price terms, which currently translate into a value of around 50 billion euros ($55 billion), the two companies said in a joint statement.
The deal, which is equivalent to one-third of Germany’s annual gas demand, marks a major milestone in Berlin’s efforts to replace former long-term supplier Russia, which first cut and later suspended deliveries.