UK-based energy company Centrica has entered into a long-term $8bn worth sale and purchase agreement with Delfin Midstream to procure one million tonnes per annum (MTPA) of liquefied natural gas (LNG) from the latter’s Delfin Deepwater Port in the US.
The agreement will be for the supply of LNG for a period of 15 years on a Free on Board (FOB) basis.
Under the agreement, Centrica will get supplies of nearly 14 LNG cargoes per annum. This could help in providing sufficient energy to heat 5% of British households for 15 years.
Delfin Midstream’s brownfield deepwater port is located 74 nautical kilometres off the coast of Louisiana. The project involves the construction of four floating liquefied natural gas (FLNG) vessels with a combined production capacity of up to 13.3 million tonnes of LNG per annum.
Centrica group chief executive Chris O’Shea said: “This agreement is good news for our customers and the country. The last 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 biggest priorities, but I’m acutely aware that we also need to look ahead to manage future risks and secure our supplies.”
The sale and purchase agreement follows the heads of agreement signed by the parties last August.
Delfin Midstream CEO Dudley Poston said: “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.”
According to Centrica, operations and the first LNG are anticipated to begin at the Delfin Deepwater Port in 2027.
The UK company also has a three-year supply deal with Norwegian oil and gas firm Equinor that will heat 4.5 million houeholds through to 2024.
Last month, Centrica said that the reopening of the Rough gas storage facility in October last year is now meeting half of the total gas storage of the UK.
The company stated that as a foundation customer of the Delfin LNG project, its offtake supports investment in the next wave of incremental supply of LNG from the US. Besides, it will add a varied and flexible LNG portfolio, said the UK-based company.
