The boss of the UK’s largest gas supplier, Norway’s Equinor, has warned it will be difficult to further increase output after ramping up production last year to help fill the void in Europe’s stocks amid Russia’s war in Ukraine.
Anders Opedal said that natural gas demand will have to be lower across the continent to help compensate for the loss of Russian supplies while revealing annual profits that smashed the company’s previous record.
While the UK is a net exporter of gas during the warmer months of the year, the country typically relies on Norway for 25% of its annual demand due to a lack of storage capacity.
Equinor, which was formerly known as Statoil and is majority-owned by the Norwegian state, ramped up production by 8% in the wake of the invasion of Ukraine when Russia cut gas flows to Europe in retaliation for Western sanctions.
Its efforts – coupled with energy-saving measures continent-wide – have helped contribute to the lights remaining on during the winter so far.
Challenges over the past few months have included a slow return to output at many French nuclear plants.
The UK has relied on gas flows from Norway during cold snaps when the wind has failed to blow, recently using the Demand Flexibility Service to ease pressure during peak hours.
Recent industry figures have shown that gas has accounted for more than 40% of power output over the past week.
The chief executive’s remarks are important as Europe braces again to restock depleted supplies ahead of the next winter.
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While wholesale costs have fallen across the continent from the peaks seen at the end of last summer, prices could yet rise again in the coming months.
The possibility of a cold end to the current winter, storage capacity and gas availability remain concerns despite further deals with the US to bolster liquefied natural gas volumes.
The record prices for natural gas helped Equinor post $74.9bn (£61.9bn) in adjusted operating profits for 2022, more than double its previous record, helping net profits to $28.7bn (£23.7bn).
It posted its earnings as oil and gas majors BP and Shell face a domestic backlash over their own profits, with government critics demanding a higher windfall tax to help compensate the public purse amid the energy-led cost of living crisis.
Tessa Khan, executive director of the Uplift environmental group, said: “While Equinor rakes in these shocking profits… pensioners in the UK are having their homes broken into by debt collectors or, worse, cut off because they can’t afford their gas bill.”
“Equinor has got rich on the back of the suffering of millions of people in the UK,” she added.