Centrica says deal guarantees gas supply to UK households for next 10-years
BRITISH Gas owner Centrica has agreed a £13 billion supply deal with Norwegian state-owned oil and gas producer Statoil.
Centrica said the deal, which begins in2015, will guarantee gas supply for UK homes for the next 10-years, based on a figure of 3.5 million homes.
This follows a £2 billion long term supply deal agreed in February with Quatargas for 2.4 million tonnes of liquefied natural gas.
In a separate deal, Centrica has also acquired Norwegian North Sea assets from Statoilin the Kvitebjorn field for $1,525 million (£965 million).
An additional payment of up to $100 million (£63 million) will also be paid if theKvitebjorn asset meets performance targets.
The Kvitebjorn assets are close to Centrica's existing Statfjord field, which means production can be exported to the UK.
Centrica said the deal will increase its overall production by around 25 per cent, or 34,000 barrels of oil per day.
Chief executive, Sam Laidlaw, said Centrica is at the forefront of helping to deliver UK energy security and our strategic relationship with Statoil links us to one of the worlds largest gas exporters and a natural partner to the UK.
Following the signing of this 10 year deal, the total value of future gas supplies secured by Centrica for the UK now stands at more than £50 billion.
As well as being the second largest gas producer in the UK, we also have one of the fastest growing exploration and production businesses on the Norwegian continental shelf.
This transaction is an important further step in building the business and deploys capital to deliver value.
Much of the gas acquired through this transaction will also come to the UK market, providing further energy security for British Gas customers long into the future.
Laidlaw has agreed a number of deals recently centred on a drive to re-establish Centrica as an exploration firm as opposed to a purchaser of oil and gas on the wholesale energy markets.
Most of the exploration assets held by British Gas were transferred over to BG Group when it demerged in the 1990s.
Centrica also announced today it has entered into a strategic partnership with Statoil to explore and develop a region north east of the Shetland Islands.
Statoil which managed around 80 percent of Norway's oil and gas production, is also reorganising its exploration activities.
In August Statoil announced one the largest ever oil finds in the North Sea at the Aldous Major Southfield, which was revised upward in October to 1.5 billion barrels of recoverable oil.
President and chief executive of Statoil, Helge Lund,said: "Today's announcement is of high strategic importance.
"Statoil and Centrica, two of the UK's key energy players, are taking on long-term commitments in order to contribute to UK's energy security.
"The agreement demonstrates that natural gas is set to play an important role in the UK's long term energy mix.
"Natural gas has all the features needed for the UK to reach its long term energy policy goals of affordability, security of supply and CO2 emissions reduction."