Good Neighbor Deal for Norwegian Gas in UK

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Researched by Industrialinfo.com (Industrial Information Resources Inc.; Houston, Texas). A 15-year contract to deliver 1.6 billion cubic meters of natural gas a year to the UK has been signed between Norway's Statoil and BP. This follows the abolition of the Norwegian gas sales committee GFU and is the first big gas supply deal to Britain from Norway's continental shelf since the Frigg field opened in 1977.

This deal, which represents approximately 1.5% of the UK's current demand, is part of a trend to locate cleaner, secure natural gas sources as demand grows. The proximity of the UK market and its growth potential suits the Norwegian producer.

At the same time, BP is working to meet the long-term needs of customers and is investing in the search for new reserves in the UK, Norway, and the Netherlands. The ongoing agreement with Statoil also gives BP the flexibility to meet the short-term needs of customers in the highly competitive spot-driven UK market.