UK's Centrica and Delfin Midstream sign 15-year US LNG supply deal - Reuters
UK's Centrica and Delfin Midstream sign 15-year US LNG supply deal | Reuters
UK's Centrica and Delfin Midstream sign 15-year US LNG supply deal
- Summary
- Companies
- Deal has market value of $8 billion
- Centrica will take delivery of about 14 cargoes per year
- Subject to Delfin's planned Deepwater Port going ahead
- First LNG expected from the port in 2027
July 11 (Reuters) - British Gas parent firm Centrica (CNA.L) has signed a 15-year liquefied natural gas (LNG) supply agreement with U.S.-based Delfin Midstream, the companies said on Tuesday.
Britain and other European countries have turned to the United States for LNG to help reduce their reliance on Russian gas following Moscow's invasion of Ukraine in February 2022.
More than 70% of U.S. LNG exports went to Europe last year.
The long-term supply deal for 1 million tonnes of LNG a year from Delfin's planned Deepwater Port off the coast of Louisiana has a market value of $8 billion.
Centrica expects to take delivery of about 14 LNG cargoes a year, providing enough energy to heat about 5% of UK homes, it said.
Pending Delfin's final investment decision on the port project, operations and first LNG are expected in 2027.
Developers typically agree long-term supply agreements before making a final investment decision.
In December, the United States and Britain announced on an energy partnership aimed at sustaining a higher level of LNG exports to Britain and collaborating on ways to increase energy efficiency.
The U.S. became the world's largest LNG producer by installed capacity in 2022 and is planning to expand capacity further.
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Related Knowledge Center: Liquefied natural gas
Driven by plentiful natural gas produced from shale plays, the United States began exporting liquefied natural gas in 2016 when the Sabine Pass terminal in Louisiana opened and shipped its first cargo. Since then, additional capacity, or trains, have been added to Sabine Pass, and terminals have become operational in Cameron Parish, La.; Hackberry, La.; Cove Point, Md.; and Corpus Christi, Texas. The Energy Information Administration projects that U.S. LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world, behind Australia and Qatar. The tariff war with China has the potential to impact some final investment decisions for additional terminals in the coming months.