Under the agreement, Devon will supply 50,000 (MMBtu) per day of natural gas to Centrica’s trading arm, Centrica Energy, over a 10‑year term starting in 2028, according to a Centrica statement.
The firm said this is equivalent to five LNG cargoes per year.
Moreover, the volumes will be indexed to European gas hub price (TTF).
Centrica noted that this sale and purchase agreement supports its objective of managing market price risk in its LNG portfolio by aligning feed gas pricing with European gas prices whilst providing Devon with international price exposure.
The physical volumes of this deal in the US will be handled and optimized by Centrica’s US subsidiary that recently announced the opening of an office in New York.
The deal follows similar agreements over recent years, demonstrating Centrica’s “innovative” approach to building partnerships and growing its LNG and trading business, it said.
“Gas remains an essential transition fuel and, through long-term agreements like this, Centrica ensures competitively‑indexed gas supply for our LNG business and builds on the deep and important energy trade links between the US and the UK,” Chris O’Shea, CEO of Centrica, said.
Centrica boosting LNG business
A consortium of Centrica and US-based investment firm Energy Capital Partners, part of Bridgepoint Group, just agreed to buy National Grid’s Grain LNG terminal in the UK.
Centrica said that the firm and ECP will each own 50 percent in the facility under the deal, with an enterprise value of 1.5 billion pounds ($2.03 billion).
Before this, Centrica took a minority stake in compatriot LNG fuel supplier Gasrec.
In June, Thailand’s PTT also signed a heads of agreement to supply LNG to a unit of Centrica in Asia.
Centrica’s other deals include an agreement with Delfin, the developer of a US floating LNG project, as well as deals with Spain’s Repsol, US producer Coterra Energy, and Brazil’s state-owned energy firm Petrobras.
