Europe’s New Gas Giant: Equinor’s Rise to Prominence Amidst Debate Over Dependency and Environmental Concerns

Equinor, the Norwegian oil and gas company, has risen to prominence as Europe’s primary supplier of natural gas following Russia’s invasion of Ukraine. This has resulted in increased scrutiny over the continent’s reliance on a single supplier, despite concerns over the environmental impact of continuing to rely heavily on fossil fuels. Equinor now supplies 30% of Europe’s gas, while Gazprom provided approximately 35% prior to the conflict. The company’s visibility “dramatically changed” due to reduced gas flows from Russia, leading to questions over European leaders’ dependence on a single supplier. However, amidst calls for a greater emphasis on renewable energy, some European figures have acknowledged the need for continued investment in gas, given its importance in the current environment. Equinor’s profitability from gas exports hit a record high of 1.4tn kroner ($130bn) in 2022. However, this has led to criticism that Europe is sacrificing its wider green transition goals for the benefit of Norway. Traders have also highlighted the risks associated with an increased reliance on Equinor, with sudden outages causing significant price fluctuations in the market. While Europe is currently in a better position than it was a year ago, circumstances remain volatile, and any threats to gas supply could result in market disruption and heightened household bills. Equinor plans to increase its gas production capacity and streamline maintenance work to address these issues. Its CEO, Anders Opedal, stated that the company aims to be a “stable and long-term supplier of energy” for several decades to come. Nonetheless, the arrival of fresh waves of LNG from the US and Qatar over the next few years could reduce the significance of Equinor and Norway’s gas to Europe. BoA’s Christopher Kuplent predicts that this will make it harder for Norway to organically grow its gas production and exports.