Centrica signs LNG Heads of Agreement with Delfin
Windsor, England and Houston, TX, August 9th, 2022 – Centrica plc (“Centrica”) (LSE:CNA) and Delfin Midstream Inc. (“Delfin”) today (Tuesday) announced the signing of a Heads of Agreement to purchase 1.0 million tonnes per annum (MTPA) of Liquefied Natural Gas (“LNG”) for 15-years on a Free on Board (“FOB”) basis at the Delfin Deepwater Port, located 40 nautical miles off the coast of Louisiana. This agreement provides Delfin with another key foundation customer which will facilitate a Final Investment Decision (FID) for the first floating LNG export facility in the United States by the end of this year, with operations expected to commence in 2026.
Dudley Poston, CEO of Delfin, said:
“We are very pleased to enter into this agreement with Centrica and continue to rapidly advance Delfin’s position as a leading source of reliable low-cost energy from the safety of the US at compelling prices. Market demand for long-term LNG continues to be strong and buying activity from Europe and various other geographies has accelerated over the past few months. As a modular project that can make FID in 3.5 MTPA increments, this agreement materially advances our first vessel’s path towards FID later this year.”
Against a challenging geopolitical and macroeconomic environment Centrica has been working to bolster the UK and Ireland’s energy security both now and over the longer term. Last month Centrica signed an additional £4bn supply agreement with Equinor to supply 4.5 million UK homes through to 2025, and this £7bn agreement with Delfin, which starts in 2026, will underpin the expansion of US LNG export capacity, an increasingly important source of stable, reliable future gas supply.
Chris O’Shea, Centrica Group Chief Executive, said:
“Natural gas has now been recognised as an essential transition fuel on the path to net zero just at the point geopolitical uncertainty is impacting the global gas market. Additional US gas export capacity will help increase UK, European and global energy security, reflecting the increasing importance of LNG in the global gas supply chain. I’m delighted to sign this Heads of Agreement with Delfin as we continue to deliver our new strategy, growing Centrica’s LNG portfolio and ensuring that we increase our access to a diversified range of reliable gas supplies for our customers.”
UK Secretary of State for Business and Energy Secretary Kwasi Kwarteng MP said:
“A key component of our Energy Security Strategy is that natural gas is a key transition fuel on the road to clean, affordable, home-grown energy. From renewables to nuclear, we have ambitious plans for greater energy independence, but we are also realistic about our energy needs now and in the years ahead. That means we need to secure more diverse and reliable sources of natural gas from friends, allies and strategic partners. “Today’s deal between Centrica and Delfin is positive news for the UK, helping to ensure our diversity of supply from reliable sources – like our friends in the United States – for many years to come.”
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