The Centrica PLC (LON: CNA) share price edged higher after announcing that it had signed 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.
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The contract will see Centrica take delivery of 14 LNG cargoes per year at the Delfin Deepwater Port, about 40 nautical miles off the coast of Louisiana. The gas delivered could provide enough energy to heat 5% of UK homes for the next 15 years.
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The contract has a market value of $8 billion and is part of Centrica’s efforts to increase the resilience of the UK energy market. The deal comes after a three-year supply agreement with Equinor that will heat 4.5 million UK homes to 2024 and the Rough gas storage facility reopening in October 2022.
The move to reopen the Rough facility in October 2022 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.
Chris O'Shea, CEntrica’s Group CEO, Centrica 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.”
Dudley Poston, CEO of Delfin, said: “We are excited to finalise 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.”
*This is not investment advice.
The Centrica share price.
The Centrica share price edged 0.63% to trade at 122.17p, from Monday’s closing price of 121.40p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
