Centrica signs £20 billion gas supply deal with Norway’s Equinor

Centrica, owner of British Gas, has agreed to a £20 billion deal with Norway’s Equinor to supply nearly 10% of the UK’s gas needs annually for the next decade, supporting energy security while paving the way for future hydrogen integration.

Centrica announced a long-term agreement to purchase approximately 5 billion cubic meters of natural gas each year from Norway’s state energy company, Equinor. The supply, sufficient to serve around 5 million UK homes, will begin this winter and continue until 2035, with prices linked to the prevailing market rates.

The deal builds on the longstanding energy partnership between the UK and Norway, a key gas supplier for more than 50 years. In line with the UK’s net zero ambitions, the contract includes provisions allowing gas imports to be gradually replaced by hydrogen from Equinor’s UK hydrogen projects.

Equinor is collaborating with Centrica and SSE on low-carbon hydrogen initiatives, including plans for a “pathfinder” hydrogen facility at the Aldbrough gas storage site in East Yorkshire, potentially operational by 2029.

Currently, the UK imports about two-thirds of its gas from Norway, though national demand dropped to record lows last year due to growing renewable energy capacity and increased power imports from Europe. The UK government anticipates gas demand will continue to decline throughout the next decade as electric alternatives and energy efficiency measures advance.

Centrica CEO Chris O’Shea described the deal as a “landmark agreement” highlighting the continuing role of natural gas in ensuring reliable energy supply while supporting the growth of a hydrogen market.

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