Equinor to Supply Gas to BASF, Invests in Johan Sverdup Development

Equinor said it entered into a long-term strategic agreement to supply up to 23 terawatt-hours of natural gas, or around 2 billion cubic meters, annually to BASF SE over a 10-year period.

The contract secures a substantial share of BASF’s natural gas needs in Europe, Equinor said in a news release. The gas will be sold on market terms, and deliveries will start on October 1.

BASF uses natural gas both as an energy source and as a raw material in the production of basic chemicals, according to the release. The partnership will support BASF’s strategy to diversify its energy and raw materials portfolio, Equinor said.

“This agreement further strengthens our partnership with BASF. Natural gas not only provides energy security to Europe but also critical feedstock to European industries. I am very happy that our gas also supports BASF’s efforts to reduce their carbon footprint. Gas from Norway comes with the lowest emissions from production and transportation,” Equinor President and CEO Anders Opedal said.

“We are very happy to enter into this long-term partnership with Equinor for the reliable supply of low-carbon natural gas for BASF’s operations in Europe. Equinor is a trusted and valued partner. The supply agreement not only comes with competitive terms but also supports our sustainability targets,” BASF CFO and Chief Digital Officer Dirk Elvermann said.

For the past several years, Equinor has been supplying gas and liquids to BASF, which develops a broad portfolio of solutions that are components in the manufacturing of everyday consumer goods, such as car interiors, sportswear, personal care items, and agricultural solutions, according to the release.

Development Plans for Johan Sverdup

Meanwhile, Equinor and its partners plan to invest $1.27 billion (NOK 13 billion) in the third phase of Johan Sverdrup oil field in the North Sea, approximately 87 miles (140 kilometers) west of Stavanger, Norway.

The planned new subsea infrastructure will increase recovery by 40 million to 50 million barrels of oil equivalent (boe), Equinor said in a separate statement. The development includes two new subsea templates that will be tied into existing infrastructure via new pipelines, with production expected to start in the fourth quarter of 2027.

To ensure optimal resource utilization, the project leverages artificial intelligence to analyze field layouts and well paths. This technology has enabled faster decision-making and resulted in cost savings of $80.8 million (NOK 130 million) for the phase 3 project, Equinor said.

The company said that the project also facilitates future value creation at Johan Sverdrup by adding extra well slots, and opportunities for connecting additional subsea templates.

“By building on the technologies, solutions, and infrastructure from phases 1 and 2 of Johan Sverdrup, we can carry out an efficient development with a rapid start-up of production. The project increases the recovery rate and value creation from Johan Sverdrup, one of the world’s most carbon-efficient oil and gas fields. At the same time, it contributes to stable energy supplies to Europe,” Trond Bokn, senior vice president for project development at Equinor, said.

TechnipFMC has been awarded the contract for engineering, procurement, construction, and installation (EPCI) for the subsea development, with a contract value of about $3.3 million (NOK 5.3 billion). Additional contracts, including platform modifications and the drilling of eight wells, are planned to be awarded later in the year, the company said.

Equinor said the phase 3 project will support its goal of increasing the asset’s recovery rate to 75 percent from its current 66 percent. The partnership has submitted a notification to the authorities in accordance with the existing plan for development and operation.

“In 2024, Johan Sverdrup set a production record with 260 million barrels of oil, the highest annual oil production ever from a Norwegian field. Every third barrel of oil from the Norwegian continental shelf now comes from the field. Phase 3 is an important contribution to maintaining high production from Johan Sverdrup in the years to come,” Marianne Bjelland, vice president for Johan Sverdrup, said.

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