(Bloomberg) — Orsted AS clinched a deal to receive natural gas from Norway’s Equinor ASA this winter and next, easing the strain on the Danish energy market after Russia’s cuts.
While Denmark is not in an acute energy crisis, with wind accounting for almost half of electricity generation, the loss of Russian gas this summer over payment disputes, and delays to Danish biggest field Tyra, put pressure on the Nordic nation. Last month, the government decided to lower energy use at public buildings and encouraged Danes to cut consumption of gas and electricity to avoid potential shortages.
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The deal with Equinor, totaling about 8 terawatt-hours of gas from January through April 2024 supplied via the new Baltic Pipe, equates to about quarter of expected total Danish gas consumption, Orsted said in a statement Thursday.
Combined with Denmark’s own production in the North Sea and from biogas that would be “more than enough” to cover total gas needs through winter 2024 with the Tyra field not yet back, it said.
“The agreement strengthens the security of supply in Denmark while also replacing the gas volumes that Orsted would otherwise need to buy on a volatile European gas market,” the company said.
Denmark used to be a net exporter of gas in the past but maintenance work has idled its key contributer, Tyra, until the winter of 2023-24. The country currently gets about a quarter of all its supply from biogas.
Orsted still formally has a contract with Gazprom PJSC for 20 terawatt-hours of gas per year until 2030. But the Russian exporter halted supplies on June 1, after the Danish company refused to meet the Kremlin’s demands to pay in rubles. Orsted also ceased all sourcing of biomass and coal from Russia for its power stations following Moscow’s invasion of Ukraine.
—With assistance from Christian Wienberg.