The UK’s increasing reliance on imported gas was underlined on Wednesday when the owner of British Gas announced that it had struck agreements to buy more gas from Norway and Russia.
Centrica’s 10-year deal, announced in 2011, to bring in 5bn cubic metres (bcm) a year from Norway’s Statoil, has been increased to 7.3 bcm per annum. The FTSE 100 company has also extended a deal with Gazprom, Russia’s state-owned gas company, to take delivery of 4.2 bcms each year, up from 2.4bcm.
“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,” said Centrica.
Fifteen years ago, the UK did not need to import gas, but supplies have been falling since 2000. In 2009, 45% of the natural gas used in the UK was imported, and this is expected to reach almost 70% by 2019.
Statoil will begin its deliveries from October and will provide a total of 73 bcm over the 10 years of the contract. The deal with Gazprom is with its UK arm, Gazprom Marketing & Trading, and is being secured at a time when Russian companies are the subject of sanctions because of the country’s role in the Ukraine crisis.
Centrica saidthe supply agreements with Statoil and Gazprom would meet the gas needs of 9m British homes a year and take the total amount that Centrica has committed in securing gas and electricity, through a range of suppliers, to over £50bn.
