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SSE is set to dramatically increase its dependence on Norwegian gas supplies, by increasing its current supply contract with Statoil by five times its current levels.
The UK’s second largest utility holds a six year deal with the gas supplier which runs until 2021, but said that from October this year the amount of gas imported per day will rise from around 0.5 million therms to 2.5 million therms per day.
The additional capacity represents 3 per cent of the UK’s gas demand and 25 per cent of SSE’s, the utility said.
The UK’s increasing dependence on foreign gas sources was highlighted last month with the news that British Gas parent company Centrica will increase its contracted supply with Norway by 50 per cent, and with Russia by 75 per cent in order to meet half of the UK’s 70 billion cubic metre per year demand.
“In recent years production from the UK’s continental shelf has continued to decline while global competition for natural gas has increased,” SSE acknowledged in a statement.
“This agreement therefore secures important gas supplies for both the UK and SSE’s customers, from a reliable producer with physical links between its gas resources and the UK, until the end of 2021,” it added.
SSE’s managing director of energy portfolio management Jim Smith said the deal will complement the company’s “diverse and balanced portfolio” of contracts and assets, both long and short term.
“The significant expansion of our agreement with Statoil is consistent with this strategy, securing a significant volume of gas from a reliable producer with physical links to the UK. This is good news for both the UK and SSE’s customers,” Smith said.
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