UK to sign gas deal with Norway to avoid shortages

The UK is reportedly on the brink of agreeing a natural-gas contract with Norway for up to 20 years in a bid to avoid gas shortages this winter.

Ministers are “still locked in negotiations with their Norwegian counterparts on price, the amount of gas and the length of the contract”, a source told Bloomberg, but “a deal is expected to be secured next week”.

Norway is already the UK’s largest supplier of gas – providing around half of Britain’s gas – but there is “growing competition for its output”, said The Telegraph, as countries across Europe respond to the loss of Russian supplies.

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The energy regulator, Ofgem, warned on Monday that there’s a “significant risk” of gas shortages this winter that could see some power stations switched off. Just 24 hours later, energy bosses warned of risks to gas supplies next winter even if the continent manages to avoid a crisis this year.

Liz Truss told Sky News that ministers were “looking” at multi-year gas deals with Norway and elsewhere. “I have not signed any deal,” she said, “but what I’m saying is that Britain’s energy security is vital and what we will be doing is always looking for value for money”.

Earlier, the Business, Energy and Industrial Strategy Secretary Jacob Rees-Mogg told a fringe meeting at the Tory Party conference that he’d been in talks with a “friendly country” about energy supplies.

However, Treasury officials have privately warned that Britain could end up locked in expensive long-term energy deals under proposed arrangements to secure gas from Norway and elsewhere.

The UK would have to pay a “security premium” to foreign states in return for boosting the country’s future energy security, senior government figures have told the Financial Times. Therefore, said The Sun, a new deal with Norway “risks spooking nervous markets even more”.