Centrica signs Gas deal with Statoil
Centrica CEO Sam Laidlaw and Statoil CEO Helge Lund sign an agreement at 10 Downing Street in London

Centrica, the owner of British Gas, has signed an agreement with Norway's Statoil for a gas deal worth £14 billion. The agreement is important as the UK meets 50 percent of its gas requirements by import.

This deal is expected to meet the energy needs of 3.5 million homes, which is 5 percent of the country's demand. The contract with Statoil will begin by 2015 and is for 50 billion cubic metres of gas. The owner of the British Gas has also acquired £1 billion assets in the Norwegian North Sea.

The acquisition of stakes in the Norwegian continental shelf from Statoil is expected to boost Centrica's production by a quarter and aid its mission to tap the vast profits on offer as wholesale prices soar. With this deal, Centrica is building on its growing position in Norway by increasing the scale and improving the sustainability of its upstream business.

"Centrica is at the forefront of helping to deliver UK energy security and our strategic relationship with Statoil links us to one of the world's largest gas exporters and a natural partner to the UK. Following the signing of this 10 year deal, the total value of future gas supplies secured by Centrica for the UK now stands at more than £50 billion," said Sam Laidlaw, chief executive of Centrica.

The deal is widely welcomed from political quarters as the high energy prices and energy security has become a political issue in the UK. The rising global demand for energy and the political unrest in the Middle East have contributed to a never before rise in the wholesale energy prices.

"I warmly welcome this announcement, which underlines the strength and depth of the partnership that the UK and Norway enjoy. Gas plays a central role in powering our economy, and will continue to do so for decades to come. Today's agreement will help to ensure the continued security and competitiveness of gas supplies to Britain, from a trusted and reliable neighbor," said Prime Minister David Cameron.

In an earlier development, British Gas has axed 850 staff, which the company claimed is intended to cut costs and save the consumers from higher energy costs.