2 months ago • 2 mins
What’s going on here?
Norway’s gas behemoth Equinor signed a record €50 billion ($55 billion) deal with the German state energy group Sefe this week.
What does this mean?
Germany has its industrial gas needs squared away for a while now, with Equinor set to supply a honking 129 billion cubic meters of the stuff through 2039 – enough to cover a third of its cravings. That’s a blast of good news for the country: the deal puts it a step closer to energy security. And it’s an encouraging sign for governments across the European Union too – they’re all on the lookout for stable fuel sources that aren’t Russia. This latest contract is also part of a growing strategy among EU nations to secure steady supplies while driving toward net-zero emissions by 2050.
Why should I care?
For markets: Not all heroes wear capes.
Equinor seems to keep coming to Europe’s rescue. Its number of contracts has doubled since 2021 – with more of them for longer terms – as countries twig to the fact that the transition to greener energy is going to take a lot more time. That realization is also fueling fresh interest in low-emission nuclear energy. No surprise, then, that uranium – the key component in nuclear tech – has been a top-performing commodity this year, even with a sharp slowdown in Chinese consumption.
Zooming out: Long winters.
A steady gas supply is vital for an economy, so securing this deal must have Germany feeling warmer. Just last year, it shivered through an energy crisis when Russia cut its supply, sending monthly bills skyrocketing for households and businesses. Folks were turning their thermostats to near-frosty levels and factories were cutting operating hours, or shutting down altogether. But the country’s not out of the woods: in October, its industrial output fell 0.4% – hitting a low not seen since August 2020.
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