Equinor, as one of the major producers of liquefied natural gas (LNG), has planned to increase its supply capacity to 10 to 15 million tons per year by the early 2030s. This decision has been made in response to the rising demand for this fuel in European and Asian markets.
New LNG Supply Agreements
Ingvar Egeland, Vice President of Equinor in the LNG sector, announced that the company will soon announce a new LNG supply agreement with an Asian customer. Previously, Equinor signed a 15-year LNG supply contract with Deepak Fertilizers and Petrochemicals in India in May.
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Searching for New Supply Sources
Equinor is in discussions with several parties, particularly in India and Southeast Asia, to find new supply sources. The company is focusing on securing agreements with state energy companies and fertilizer producers. Asian buyers are seeking alternative sources for LNG supply due to restrictions arising from the conflict between the U.S. and Israel with Iran.
Equinor also received its first LNG shipment from Cheniere's export facilities in Sabine Pass in August. The company expects its supply capacity to reach 7 million tons per year by 2030, when supply from the United States will reach maximum capacity. Currently, half of the company's supply comes from the Hammerfest LNG plant in Norway.
Capacity Expansion and Pricing
The plan to expand supply capacity to 10 to 15 million tons per year includes shipments priced based on Brent prices to create more diversity in pricing exposure. This supply volume does not include projects in Tanzania, where Equinor has faced delays due to government negotiations.
The Deputy Minister of Energy in Tanzania has stated that new legislation regarding LNG investments may be approved by the end of this year. As a key player in LNG supply, Equinor is seeking new supply sources from the East Coast of the United States, the West Coast of Canada, South America, and African countries excluding Tanzania.
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