Equinor ASA EQNR, the Norwegian energy giant, and Centrica plc, owner of British Gas, have inked a £20 billion gas supply agreement for 10 years starting Oct. 1, 2025. Under the terms of the deal, Equinor will supply 55 terawatt-hours (TWh) of natural gas annually, equivalent to around 5 billion cubic meters, meeting nearly 10% of the UK’s total gas demand.
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The agreement, priced at market rates, stands out as one of the largest bilateral gas supply deals in Equinor’s portfolio and marks a milestone in the UK’s efforts to stabilize energy supplies amid geopolitical uncertainty and the ongoing energy transition.
As Europe continues to adjust to the decline in Russian gas exports, the UK has increasingly leaned on Norway, which already accounts for around two-thirds of Britain’s gas supply, with Equinor being the dominant supplier. This long-term agreement ensures a stable gas flow from the Norwegian Continental Shelf, giving the UK a critical buffer against market volatility and supply disruptions, especially as the country prepares for future winter demands.
Equinor CEO Anders Opedal highlighted that the agreement supports both energy reliability and decarbonization efforts, noting the flexible and strategic role of natural gas in the energy transition. He also underscored the UK’s position as a key and longstanding partner for Equinor.
Centrica’s CEO Chris O’Shea called the deal a “significant investment in the UK’s future,” positioning natural gas as a key bridge fuel that supports both current energy needs and emerging low-carbon technologies like hydrogen and carbon capture.
With energy markets still grappling with the fallout of Russia’s supply cuts, long-term gas contracts are regaining favor among utilities and governments aiming to hedge against price spikes and ensure continuity. For Centrica, this deal complements efforts to strengthen domestic infrastructure, including gas storage, while maintaining flexibility during the energy transition.
At the same time, the agreement aligns with the UK’s push for energy resilience without undermining climate commitments. O’Shea also indicated that Centrica plans to collaborate with the government on expanding national gas storage capacity, further enhancing the country’s energy security.
Beyond conventional gas supply, Equinor is playing a leading role in the UK’s shift toward a low-carbon future. The company already operates three offshore wind farms, including Hywind Scotland, the world’s first floating wind facility, and is developing Dogger Bank, which is on track to become the world’s largest offshore wind farm.
Equinor is also advancing carbon capture and storage projects in the UK, including the nation’s first CO2 transport and storage initiative and a gas-fired power plant designed with integrated carbon capture capabilities.
This new supply agreement strengthens Equinor’s position across the UK energy value chain, from upstream gas to renewable and low-carbon infrastructure, reinforcing its role as a key partner in the country’s evolving energy landscape.
As the UK navigates an increasingly complex energy environment shaped by global supply disruptions and climate commitments, the £20 billion Equinor-Centrica deal serves as a pragmatic yet forward-looking strategy. It ensures secure, long-term gas supplies while laying the groundwork for a more resilient and sustainable energy future.
EQNR’s Zacks Rank & Key Picks
EQNR currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like Subsea 7 S.A. SUBCY, Energy Transfer LP ET and RPC Inc. RES. Subsea 7 presently sports a Zacks Rank #1 (Strong Buy), while Energy Transfer and RPC carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
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