RWE and Equinor have signed a new supply contract for between 10 and 15 terrawatt hours (equivalent to ca. 1 – 1.5 billion cubic metrers – bcm) of natural gas per year from now until 2028, according to the company's release.
This new bilateral agreement builds upon the long-standing relationship between RWE and Equinor. The contract is priced at market terms and the gas will be delivered at Germany’s virtual trading hub THE (Trading Hub Europe).
Earlier this year RWE and Equinor announced their plan to develop large-scale value chains to ensure security of supply and reduce emissions in response to the German-Norwegian Partnership on Climate, Renewable Energy and Green Industry.
The first step is to invest in and develop gas fired power plants in Germany that are ready to use hydrogen as feedstock as soon as it becomes available on an industrial scale in the country. These plants are also subject to the power plant strategy announced by the German government, which aims to create a suitable regulatory framework for new gas-fired power plants.
Key elements in the value chain will be exports of low carbon hydrogen from Norway to Germany which could help speed up the development of a hydrogen economy. Gradually, green hydrogen will also be produced using power from wind farms along the pipeline route.