Under the agreement, Whitecap will deliver 50,000 MMBtu of natural gas per day to Centrica for a period of ten years – equivalent to roughly five LNG cargoes each year, according to a statement by Centrica.
The Canadian producer develops oil and gas resources across the Western Canadian Sedimentary Basin.
Centrica said the supply will be priced against the Dutch Title Transfer Facility (TTF), the benchmark for European gas markets.
Also, the firm noted that this agreement advances its strategy of managing market price exposure across its LNG portfolio by linking feedgas costs to European price signals.
For Whitecap, the agreement provides access to international LNG-linked pricing, supporting the company’s natural gas price diversification strategy, it said.
“Entering into this innovative agreement with Whitecap underlines our focus on building a balanced LNG portfolio through strategic partnerships across the globe allowing us to deliver reliable energy solutions to global markets,” said Chris O’Shea, CEO of Centrica.
Centrica boosting LNG business
Last year, Centrica also entered into a similar deal with US-based Devon Energy.
Under this 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.
Centica is investing heaviliy in its LNG business.
In December last year, a consortium of Centrica and US-based investment firm Energy Capital Partners, part of Bridgepoint Group, completed the purchase of National Grid’s Grain LNG terminal in the UK.
The acquisition has an enterprise value of 1.5 billion pounds ($2 billion).
After taking into account 1.1 billion pounds of new non-recourse project finance debt, Centrica’s 50 percent share of the equity investment is approximately 200 million pounds, according to the firm.
During the same month, a unit of Thailand’s PTT signed a sales and purchase agreement with a unit of Centrica to supply it with LNG in Asia.
PTT International Trading (PTTT) and Centrica LNG signed the SPA for a 10-year term, starting in 2028.
