Centrica and Delfin Midstream Inc. today announced the signature of a long-term Sale and Purchase Agreement for 1.0 million tonnes per annum (MTPA) of Liquefied Natural Gas (“LNG”) for 15-years on a Free on Board (“FOB”) basis at the Delfin Deepwater Port, located 40 nautical miles off the coast of Louisiana. This agreement will see Centrica take delivery of around 14 LNG cargoes per year and could provide enough energy to heat 5% of UK homes for 15 years.
The deal, with a market value of $8bn, marks an additional move by Centrica to build further resilience in the UK’s energy security. It follows a three-year supply agreement with Equinor that will heat 4.5m UK homes through to 2024 and the reopening of the Rough gas storage facility in October 2022. Rough now provides half of the UK’s total gas storage capacity with the potential to store over 50 billion cubic feet (bcf) of gas, enough to heat almost 10% of UK homes throughout winter.
Cassim Mangerah, Managing Director, Centrica Energy, Marketing & Trading, said:
“We are pleased to be a foundation customer of the Delfin LNG project, an innovative floating liquefied natural gas infrastructure solution with shorter construction time frame and hence expedited export of natural gas from the US. Building on our 15 years of experience with LNG, this deal is truly market-leading. It provides Centrica with access to flexible supply which is fully aligned with Centrica Enery Marketing & Tradings’s overall strategy to grow the trading and optimising business across LNG, gas, power and renewables and which creates greater flexibility to optimise within our portfolio.”
As a foundation customer of the Delfin LNG project, Centrica’s offtake underpins investment in the next wave of incremental LNG supply from the US. It will complement a diversified and flexible LNG portfolio.
Dudley Poston, CEO of Delfin said:
“We are excited to finalize this SPA with Centrica, converting our previously announced Heads of Agreement and reaching another important milestone for our Deepwater Port LNG Export Facility.
“There is growing global demand for long-term, scalable LNG supply. With the off-take capacity for Delfin’s first FLNG Vessel now sold, we continue to move towards Final Investment Decision and bring this important project forward, becoming a partner to countries like the U.K. as it continues to make progress bolstering national energy security and driving down prices with clean, reliable LNG.”
The deal follows a Heads of Agreement between Centrica and Delfin in August 2022. Operations and first LNG are expected to commence at the Delfin Deepwater Port in 2027.
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