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Norway’s Equinor signed its biggest long-term gas contract in nearly 40 years on Tuesday in a €50bn deal with German state energy group SEFE.

It comes as EU countries seek stable supplies to compensate for the loss of piped gas from Russia.

The deal will supply Germany with 129bn cubic metres of gas up to 2039, enough to cover a third of the country’s industrial demand, Anders Opedal, chief executive of state-owned Equinor, told the Financial Times.

It ensured energy security for Europe’s industrial hub and showed “close collaboration” between Germany and Norway after Moscow cut gas supplies in retaliation for sanctions over its full-scale invasion of Ukraine, he added.

The agreement would reflect market prices, which at current value would make the deal worth about €50bn, according to people with knowledge of the contract.

The sudden depletion of cheap Russian gas last year left EU countries rushing to find gas supplies and secure contracts with other friendly countries.

The European Commission has signed memorandums of understanding with several gas producing nations such as Qatar and the US in order to guarantee stable flows.

EU energy ministers will discuss the level of gas supplies this winter and agree on the extension of emergency measures introduced last year, such as cuts to gas demand, at a meeting on Tuesday.

EU energy commissioner Kadri Simson said it was “necessary” to extend the measures “due to the fact that despite the relatively good start to the winter the geopolitical situation remains very fragile”.

Opedal said Equinor’s deal with SEFE was part of increasing appetite for long-term gas contracts as EU governments lock in supplies despite ambitious decarbonisation targets. The bloc aims to reach net zero emissions by 2050.

“We are signing contracts now that are longer and for larger volumes,” Opedal said, adding that between 2021 and 2023 the total number of contracts agreed by Equinor had more than doubled, with a notable increase in long-term deals.

He added that the trend had also been driven by the realisation that renewable energy would not come online quickly enough to replace fossil fuel demand. “It takes time to develop a new energy system and we will need gas,” he said. Gas when burnt produces less emissions than coal or oil.

The gas will be delivered through pipes from Norway to hubs in the UK, Netherlands and Germany.

SEFE, previously named Gazprom Germania and owned by the Russian energy group Gazprom, was nationalised by Berlin in November 2022 and recapitalised for €6.3bn in December after incurring big losses.

The bailout was meant to cover the cost of having to find alternative gas supplies after Moscow reduced piped gas flows.

Norway has replaced Russia as the EU’s largest gas supplier, providing half of the bloc’s piped gas.

The Equinor deal also includes a non-binding letter of intent for SEFE to buy hydrogen produced by the Norwegian group using gas but with carbon capture technologies.

Hydrogen is seen as a crucial fuel for decarbonising heavy industries such as fertiliser and steel but low carbon hydrogen has yet to be produced at any significant scale.

SEFE would become “a long-term off-taker of giga-scale hydrogen supplies from Equinor starting in 2029 and continuing towards 2060”, the Norwegian company said.

In January, the German and Norwegian governments agreed to co-operate on development of clean hydrogen supplies and carbon capture technology, which is similarly unproven at commercial scale.

Henning Gloystein, director of energy, climate and resources at the consultancy Eurasia Group, said the agreement was “a bit theoretical but you’d hope that the combined financial engineering efforts of Norway and Germany could achieve some results in this sector by the 2040s”.