UK's Centrica and Delfin Midstream sign 15-yr U.S. LNG supply deal
July 11 (Reuters) — British energy company Centrica has signed a 15-year liquefied natural gas (LNG) supply agreement with U.S.-based Delfin Midstream, the companies said on Tuesday.
The deal for long-term supply of 1 million tonnes of LNG a year has a market value of $8 billion and is the first sale for Delfin’s planned Deepwater Port off the coast of Louisiana.
Pending Delfin’s final investment decision on the port project, Centrica will take delivery of about 14 LNG cargoes a year. The supplies could provide enough energy to heat 5% of UK homes for 15 years, Centrica added.
Operations and first LNG are expected from the port in 2027.
The U.S. became the world’s largest LNG producer by installed capacity in 2022 and is planning to expand capacity further.
Developers typically agree long-term supply agreements with customers before making a final investment decision. (Reporting by Nora buli in Oslo and Eva Mathews in Bengaluru Editing by David Goodman)
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.