Norwegian energy company Equinor announced that it has signed a 10-year gas supply contract with British company Centrica worth around $27 billion, AFP reported.

Equinor will supply Centrica with around 5 billion cubic meters of natural gas per year, covering almost 10% of the UK's fuel needs.

“This agreement will continue to support the UK's energy security with reliable gas supplies from the Norwegian continental shelf,” said Equinor CEO Anders Opedal.

According to the International Energy Agency, natural gas accounts for 38% of the UK's total energy supply, making it the most important fuel source, and the country is heavily dependent on imports.

Russia's attack on Ukraine and Western sanctions have shaken energy markets, causing a price spike that British consumers are still struggling with.

Centrica owns British Gas, the country's largest gas supplier.

“Over the past few years, we have seen first-hand how important energy security is,” said Centrica CEO Chris O'Shea.

“Today's deal not only secures the UK's energy security, but also paves the way for the hydrogen market to flourish,” he added.

The two companies said that natural gas has an important role to play as a transitional fuel in countries' transition to renewable energy sources due to its flexibility. | BGNES