Equinor, SEFE forge long-term gas and hydrogen agreements for Germany’s energy security

Equinor, a global energy leader, and Germany‘s state-owned energy company SEFE (Securing Energy for Europe) have executed long-term gas sales agreements that will significantly bolster Germany’s energy security. Starting from January 1, 2024, Equinor will supply SEFE with 111 terrawatt hours (approximately 10 billion cubic meters – bcm) of natural gas per year until 2034, with an option to extend for another five years.

Meeting a Third of Germany’s Industrial Demand

The annual volumes agreed upon are equivalent to one-third of German industrial demand, marking a significant step in securing the country’s energy needs. The potential five-year extension encompasses a total of 319 TWh (around 29 bcm) over the period.

Pioneering the Hydrogen Economy

Alongside the gas supply, the companies have signed a non-binding letter of intent (LoI) for SEFE to become a long-term off-taker of giga-scale, low-carbon hydrogen supplies from Equinor, starting in 2029 and continuing until 2060. This initiative is part of a strategic response to Europe’s need for reliable energy supply and decarbonization at scale.

Equinor to Supply 111 TWh of Natural Gas Annually to Germany’s SEFE in Landmark Deal

Leadership’s Vision for Energy Partnership

Equinor’s CEO, Anders Opedal, expressed his satisfaction with this landmark agreement, noting the long-standing energy partnership between Equinor and Germany. Dr. Egbert Laege, CEO of SEFE, highlighted the importance of the agreement in achieving decarbonization goals while ensuring energy security. He emphasized SEFE’s collaboration with Equinor in developing the hydrogen economy and potential business opportunities in hydrogen transport and storage.

Collaboration on Hydrogen and Sustainable Energy

A key element of the potential hydrogen collaboration is SEFE’s role as a long-term off-taker of low-carbon hydrogen from Equinor’s projects. The ambition is to supply SEFE with industrial-scale low-carbon hydrogen, beginning with 5 TWh per year from 2029 and increasing to 40 TWh per year from 2050 towards 2060.

Gas Delivery and Historical Significance

The gas will be delivered to key European trading hubs, including Trading Hub Europe (THE) in Germany. The agreements, signed in Berlin on December 19, 2023, by Equinor’s CEO Anders Opedal and SEFE’s CEO Dr. Egbert Laege, are among the largest gas sales agreements in Equinor’s history.

Conclusion:

The agreements between Equinor and SEFE represent a significant step forward in Germany’s energy security and the move towards a sustainable and decarbonized future. This historic energy partnership underscores the evolving landscape of the energy sector, with a focus on sustainability and long-term supply assurance.