In a joint statement released Tuesday, Centrica and Delfin Midstream Inc. announced the signing of a long-term purchase and sale agreement for one million tons of LNG per year for 15 years free on board at the Delfin deep-water port. Louisiana.
The deal has a market value of $8 billion, according to the statement, which notes that the deal will see Centrica deliver around 14 LNG cargoes a year “and could provide enough power to heat the five per cent of UK homes over 15 years.” The statement highlighted that the agreement marks a further step by Centrica “to improve resilience in the UK’s energy security”.
Operations and first LNG are expected to start at the Delfin deepwater port in 2027, the statement revealed.
The Centrica and Delfin deal follows an agreement between the companies in August 2022. It also follows a three-year supply agreement between Centrica and Equinor in June 2022 and the reopening of the Rough gas storage facility in October 2022.
“This agreement is good news for our customers and the country [UK]”, said Chris O’Shea, the group chief executive of Centrica in a statement from the company.
“The past year has demonstrated the critical importance of investing in the UK’s energy security. Addressing the immediate impact of the energy crisis on our customers has been one of our top priorities, but I am keenly aware that we have also to look ahead to manage future risks and secure our supplies,” he added.
“Natural gas is an essential transition fuel in the move to net zero and securing international agreements like this are vital to the UK’s energy security. As well as strengthening UK-US trade links, this agreement, together with the re-opening of Rough and our flagship agreement with Equinor, shows that Centrica is investing heavily in securing the future of the UK’s energy supply and tackling one of the underlying causes of the energy crisis,” he continued.
In the statement, O’Shea noted that the company is ready to invest “several billion pounds in additional projects, creating thousands of new jobs in the UK, with the right regulatory framework”.
Dudley Poston, CEO of Delfin, said: “We are delighted to finalize this SPA with Centrica, turning our previously announced heads of agreement and achieving another important milestone for our port LNG export facility of deep waters”.
“There is a growing global demand for scalable, long-term LNG supply. With the gathering capacity of Delfin’s first FLNG vessel now sold, we continue to move towards the final investment decision and move forward with this important project, becoming in partnering with countries like the UK as it continues to make progress strengthening national energy security and reducing prices with clean and reliable LNG,” he added.
HOA, Equinor Deal, Rough Storage
In a joint statement on August 9, 2022, Centrica and Delfin announced the signing of a head of agreement to buy one million tonnes of LNG per year for 15 years free on board at the Delfin Deepwater Port.
That statement highlighted that the deal provided Delfin with “another key customer that will facilitate a final investment decision for the first floating LNG export facility in the United States later this year, with the operations scheduled to begin in 2026.”
In June last year, Centrica and Equinor announced an agreement to deliver additional gas supplies to the UK. In a statement published on its site at the time, Centrica revealed that this new gas supply agreement will see Equinor deliver to Centrica “enough gas over the next three winters to heat an additional 4.5 million homes”.
On October 28, 2022, Centrica announced the reopening of the crude gas storage facility, “after major engineering upgrades over the summer and commissioning in the early fall.”
“The initial investment program means the company has made its first gas injection at the site in more than five years and is in a position to store up to 30 billion cubic feet of gas for UK homes and businesses during winter 2022/23, increasing the UK’s energy resilience,” Centrica said in a company statement at the time.
In June this year, Centrica announced an increase in gas storage capacity at Rough, which it called the largest gas storage facility in the UK.
“At the time Rough reopened for gas storage, it was able to store approximately 30 billion cubic feet of gas for UK homes and businesses. Further investment in the facility means Rough will now be able to store up to 54 bcf of gas, increasing the UK’s energy resilience for the coming winter,” Centrica said in a statement posted on its site last month.
“Rough will help keep prices low for consumers by balancing the UK gas market, injecting gas into the facility when there is excess supply and putting that gas back into the UK gas network when customers need it most, keeping prices lower at this peak demand,” added Centrica in the statement.
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