Centrica increases gas supply volumes with Statoil and Gazprom

Statoil has made an agreement with Centrica Energy to increase the volume of gas it supplies to Centrica under an existing supply agreement.

In 2011, Statoil signed a 10-year agreement with Centrica for the supply of 5 billion cubic metres (bcm) of gas per annum to be delivered to the UK from October 2015.

The new agreement will increase the volume of gas by a further 2.3 bcm per annum, taking the total volume to be delivered over the 10 years period to 73 bcm. According to Statoil, the agreement has been made at market terms and conditions.

“We are very happy to have made this agreement with Centrica. The agreement confirms Statoil’s position as a reliable and competitive supplier of gas to the UK, which is a very important market to Statoil,” says Ann-Elisabeth Serck-Hanssen, acting Senior vice president Marketing and trading in Statoil.

In a separate agreement, Centrica has also extended its gas supply contract with Gazprom Marketing & Trading Limited (GM&T), a UK-registered subsidiary of OAO Gazprom, to increase the volume of gas it is buying under the agreement it signed with GM&T in 2012.

The new agreement, combined with the volumes agreed in 2012, takes the average volume of gas to 4.16 bcm per annum, taking the total volume to be delivered to the UK under the agreement to 29.1 bcm.

According to Centrica, Britain needs around 70 bcm of natural gas each year to heat homes and businesses and to generate electricity and the UK now needs to import more than half of this.

The company explained that the long-term supply agreements with Statoil and GM&T will meet the gas needs of 9 million British homes every year and take the total amount that Centrica has committed in securing gas and electricity, through a range of suppliers, to over £50 billion ($78.3 billion).