SEFE and Equinor forge gas and hydrogen ties

German Securing Energy for Europe (SEFE) and Norway’s energy major Equinor have signed a long-term gas sales agreement, as well as a non-binding letter of intent (LoI) on large-scale hydrogen supplies.

Under the gas sales agreement, Equinor will supply SEFE with 111 TWh (circa 10 bcm) of natural gas per year from January 1, 2024, until 2034, plus an option for another 5 years, at terms reflecting market prices. The 5-year option is for a total of 319 TWh (around 29 bcm) over the period.

The non-binding LoI was signed with the intention that SEFE will become a long-term off-taker of giga-scale, low-carbon hydrogen supplies from Equinor starting in 2029 and continuing towards 2060.

Specifically, the ambition is to supply low-carbon hydrogen to SEFE at an industrial scale, starting from 5 TWh per year from 2029 and ramping stepwise up to 40 TWh per year from 2050 towards 2060, SEFE revealed.

Equinor’s CEO Anders Opedal said: “This is a response to Europe’s need for a long-term, reliable supply of energy and a viable route to decarbonization at scale. Equinor and Germany have enjoyed a strong energy partnership ever since the start of Norwegian gas exports in 1977. The total volumes we have agreed on make this one of the largest agreements we have made as a company, and the supplies will contribute to energy security for Germany and Europe.”

“I am also pleased to sign the letter of intent to explore opportunities to supply SEFE with low-carbon hydrogen at industrial scale for decades to come, enabling European industries and flexible gas power plants to accelerate decarbonization.”

SEFE’s CEO Egbert Laege stated: “By signing the agreements for gas and hydrogen supply, we have teamed up with a strong European supplier that brings us a big step closer to our common goal of decarbonizing the energy sector while at the same time providing energy security. The procurement of natural gas from the Norwegian continental shelf ensures the sustainable and future-proof supply for European and, in particular, German customers in the household and industrial sectors.”

“SEFE and Equinor share ambitious goals to accelerate the development of the hydrogen economy. This includes joint business opportunities related to the transport and storage of hydrogen for the future. SEFE Group’s storage company Astora could be a key building block in this.”

To remind, in October 2023, Equinor inked a supply agreement for natural gas with Germany’s RWE, which is expected to aid in bolstering Germany’s energy security.

According to Equinor, the agreement was signed for 5 years, with volumes of between 10 to 15 TWh per year, equivalent to around 1 – 1.5 bcm of natural gas per year until 2028.

• Germany secures more Norwegian gas, as Equinor and RWE pen five-year supply agreement

Another significant deal was made in October 2023 between SEFE, via its subsidiary WINGAS, and Norwegian Gen2 Energy. The two parties signed a transaction term sheet for the delivery of green hydrogen.

According to Gen2 Energy, the sheet defines the terms and conditions for a final sales and purchasing agreement and represents a major step to realize the import of green hydrogen from Norway to Germany.

• Gen2 Energy & SEFE move forward with Norway to Germany H2 import deal

To note, a joint Norwegian-German feasibility study, carried out by the Norwegian state-owned company Gassco and the German energy agency DENA, on behalf of the industry, has shown that, given a number of assumptions, it is technically possible to establish a value chain for transporting large quantities of hydrogen from Norway to Germany.