Norway's PM mulls long-term gas supply deals for Europe
Norway's prime minister Jonas Gahr Stoere will open talks with domestic producers on long-term gas supply contracts to reduce price volatility for European buyers, Reuters reported September 13, citing Norwegian public broadcaster NRK.
Equinor is majority owned by government-held investors and may, therefore, be more responsive to the government's position. Negotiations are expected to start September 15, and could also involve other key Norwegian upstream players like TotalEnergies, Shell, Wintershall Dea, Vaar Energi and ConocoPhillips.
Norway has now overtaken Russia as Europe's biggest supplier of piped gas, following steep cuts in Russian supply in recent months. Traditionally Norway's market share is greatest in northern European markets. Across the EU, Norway meets around 25% of gas demand with pipeline deliveries reaching 9.49bn m3 in May.
A further 100 TWh (9.5bn m3) in Norwegian piped gas is anticipated to become available to EU customers under a cooperation pact between Oslo and the EU signed in June. For instance, Equinor has benefited from increased production permits at three major Norwegian fields - Heidrun, Oseberg and Troll. Operators have also been sending more gas that would have normally been injected into reservoirs to boost oil recovery.
Stoere also repeated his opposition to a price cap levied on Norwegian gas at EU-level. Such a move would be a "bad choice", he said.
Some EU member states have suggested a price cap on gas prices for Russian imports into the bloc could be extended to all suppliers. But European Commission president Ursula von der Leyen sounded more sanguine about this prospect in her "State of the Union" speech, delivered to a session of the European Parliament on September 14. Der Leyen claimed a range of "emergency and temporary measures" like windfall taxes, expected to raise above €140bn from electricity markets alone, could be triggered while the EU works to reduce gas prices alongside Norway and other friendly suppliers.
Punitive measures would target those guilty of weaponising the bloc's energy supply, namely Russia, whose share of European piped gas now amounts to just 9%, down from 40% before the war, von der Leyen said. The president also predicted new benchmarks could be used to reflect increased LNG usage in EU grids, versus the piped gas-dominated mix that informs continental benchmarks at present.