Norway's Equinor Open to More Long-Term Gas Deals

(Reuters) — Norway's Equinor would welcome more long-term supply agreements for its natural gas production, after announcing several such deals last year, the head of its marketing, midstream and processing division said on Wednesday.

Equinor already sells about 30%-40% of its gas volumes under long-term contracts, Irene Rummelhoff told Reuters on the sidelines of the group's quarterly results and strategy update in London.

"And we're open to sign more long-term contracts, but we're definitely not desperate to sell them because we can easily place the volumes in the market," she said.

In December, Equinor signed a gas deal valued around 50 billion euros ($55 billion) with German state-owned energy firm Sefe that will cover one-third of the industrial gas needs of Europe's largest economy.

It also agreed deals with Germany's RWE and Austria's OMV last year.

Equinor in 2022 overtook Russia's Gazprom as Europe's biggest supplier of natural gas as Moscow's invasion of Ukraine upended decades-long energy ties.

Rummelhoff said customers signing long-term contracts pay a premium on the market price to reflect security of supply but did not provide detail on the size of that premium.

The deals include a take-or-pay clause, whereby customers have to take all the contracted volumes, but may sell excess gas on the market, she added.

European gas prices hit a record of more than 340 euros per megawatt hours (MWh) in 2022, but fell nearly 60% last year amid more supply from globally-sourced liquefied natural gas (LNG) and Norwegian pipeline gas.

They were last just under 30 euros/MWh, still above levels seen before the 2022 energy crisis.

"We don't expect to see a lot of new LNG supply but nevertheless the market seems to be fairly well balanced," Rummelhoff said of the outlook for 2024, adding a mild winter has also helped.

Meanwhile, Equinor is also seeing signs of improving demand, with CEO Anders Opedal citing a 10% rise from industrials in Europe, especially in Germany and France.

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