THE UK Government is eyeing up a deal with Norway to secure a 20-year contract to receive natural gas in an effort to prevent winter blackouts, an unnamed source has said.
According to Bloomberg, an insider said that UK ministers are looking to agree on a price with the Norwegian government but that, because of the length of the proposed contract, there’s a risk the UK could be locked into high costs long-term.
Current price fluctuations mean that suppliers could demand higher prices to bolster their profits but there is uncertainty over whether they can make more money by selling now or in the future.
The UK Government is said to be eager to avoid the risk of embarrassment over potential power failures following Ofgem’s warning of a “significant risk” of gas shortages forcing power stations to be switched off this winter.
Europe’s gas supplies have been under mounting pressure as Russia has looked to undermine European energy security following sanctions for its invasion of Ukraine.
Liz Truss has also hinted at discussions taking place while speaking with Sky News, saying “we are looking at long-term energy contracts with other countries”.
She added: “I have not signed any deal.”
Meanwhile, Energy Secretary Jacob Rees-Mogg told a meeting at the Tory party conference that he has been speaking with a “friendly country” about energy supply.
Talks are also being held between the UK and American liquefied natural gas producers for 20-year term supply contracts.
The Government’s team tasked with energy supply negotiations for new gas deals is being led by former M&A banker Madelaine McTernan - who was also in charge of the task force that secured Covid vaccines during the pandemic.
