By the OGJ Online Staff
LONDON, July 9 -- Statoil AS said Monday that it has signed a 15-year deal to supply BP PLC up to 1.6 billion cu m/year of natural gas across the North Sea to the UK.
Sales will begin in October. It is the first long-term gas sales agreement to be signed following the closing of the Norwegian gas sales committee and the first "significant" deal for gas supplies to the UK from the Norwegian continental shelf since the Frigg field contract in 1977.
Statoil calculated the gas delivery will cover 1.5% of annual UK demand.
"Statoil is very satisfied with this contract. The UK gas market is attractive for us because of its size, the proximity to Statoil's reserves and the market growth potential," said Rune Bjørnson, recently appointed managing director of Statoil UK. "This contract demonstrates our ambition to respond to increasing UK demand with secure supplies of gas."
BP UK Gas & Power Managing Director Peter Mather said the "excellent" deal would make "an important contribution to UK energy supply as demand for cleaner natural gas grows."
He added, "It underlines BP's commitment to meeting the long-term energy needs of customers and complements our continuing investments to find and develop further North Sea gas reserves, in the UK, Norway and the Netherlands."
Mather noted that the deal showed BP's ability to enter into long-term gas supply contracts to meet the short-term needs of customers in a highly competitive, spot-price driven UK market.