Rodmac41
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Equinor, the Norwegian energy company formerly known as Statoil, has signed a 10-year contract with German state energy company SEFE. The contract requires Equinor to supply 111 TWh (10 billion cubic meters) of natural gas annually from January 1, 2024 until 2034 at a fixed price. The contract may be extended for another 5 years, but then at market prices.
The agreement reported by Equinor covers approximately 33% of the current gas needs of the German industry and is valued at around 50 billion euros (including the extension). According to the terms of the contract, the Norwegians will have to supply an additional 319 TWh (about 29 billion cubic meters) over the next 5 years.
If we calculate the cost of gas for the entire volume of supplies over 15 years, without considering the price changes in the last five years and using the current exchange rate to convert euros into dollars (in which gas is quoted at the TTF hub), then the Norwegians will supply 129 billion cubic meters of gas to Germany at a price of $422 per thousand cubic meters.
At the beginning of this week, gas in Europe cost about $380 per thousand cubic meters. Thus, the Germans pay the Norwegians a premium of approximately 10% on the contract price.
It is worth noting that compared to the price of gas exported from Russia until 2022 this is much higher in comparison. According to data from the Federal Customs Service, Vedomosti newspaper has determined that the average price of Russian pipeline gas for the EU in 2021 was $274 per 1,000 cubic meters, compared to $140 per 1,000 cubic meters in 2020.
It should be noted that although current gas prices for Europeans, and in particular for Germany, are not at record levels, such records (over a thousand dollars and upwards to absolutely mind-boggling values) were recorded only last year and did not last long. The current prices cannot also be called historically low.
Additionally, Equinor has signed a non-binding letter of intent (LoI) under which SEFE will become a long-term and significant hydrogen procurement partner. Norwegian energy companies are set to supply Germany from 2029 until 2060, according to Equinor CEO Anders Opedal. The deal is a response to Europe’s need for long-term and reliable energy supplies and will aid in the decarbonisation of European industry.
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Germany signs gas supply deal with Norway at much higher prices than they paid for Russian gas
By Rhod Mackenzie Equinor, the Norwegian energy company formerly known as Statoil, has signed a 10-year contract with German state energy company SEFE. The…
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.
Some German writer needs to write a book entitled:
“A Guide to Shooting Yourself in the Foot” or
“Following American Neocons to Your Own Destruction”
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Since none of the allegations here is linked to any source, only fools would read this article, because all of its allegations could be false: it’s just a waste of time, and it might even be deceiving its readers..
“None of the allegations are linked to sources which means that they could be false and misleading. It would be appropriate to provide links if you’re interested in garnering the trust of readers as well as to keep up a certain level of journalistic integrity on this site.”
FIFY
I’m not sure why you’re so hard on this chap but there is such a thing as constructive criticism. This guy could be 20 years old for all we know and might need some direction rather than constant bashing.
I just want to tell him that though I suspect that his allegations are true, I cannot base my own articles on nor link to anything that might be just garbage. I don’t link to a source that might just be lying or sloppy. His allegations are interesting but they shouldn’t be cited, because he fails to empower his audience to verify his allegations. Usually, liars write that way.