SSE have signed a 10-year contract with Norwegian firm Statoil for the annual supply of 500 million cubic metres of natural gas.

Expected to be completed later this year, delivery of gas is due to begin in the final quarter of 2012 to SSE’s Peterhead power station.

Alistair Phillips-Davies, Generation and Supply Director of SSE, said: “Fuel supply contracts play a key part in helping us to meet our customers’ needs and contribute to the long-term stability of our energy portfolio. This agreement with Statoil builds on our acquisition of natural gas assets earlier this year and I am confident we will be able to conclude the contract later this year.”

On average Peterhead power station consumes 1,500 mcm of gas annually and produces enough electricity to meet the needs of around two million households.

The contract will also contain provisions to allow the supply of gas to be diverted to help meet SSE’s other requirements if Peterhead is undergoing repair work.

Earlier in the year SSE acquired natural gas assets from Hess Limited.