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Centrica, Delfin sign preliminary LNG supply deal
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UK-BASED Centrica has signed a heads of agreement (HoA) to buy 1mn tonnes per year (tpy) of LNG from the US’ Delfin Midstream. The preliminary agreement takes Delfin one step closer to a final investment decision (FID) on its planned floating LNG (FLNG) export terminal in the US Gulf of Mexico.
Under the HoA, Centrica would begin receiv- ing LNG from Delfin in 2026, the same year the FLNG facility is anticipated to enter service. The agreement covers a 15-year term and its value has been disclosed at GBP7bn ($8.6bn). The detailisnotablebecauseotherbuyersofUSLNG frequently do not disclose the value of the deals they strike.
“Market demand for long-term LNG contin- ues to be strong and buying activity from Europe and various other geographies has accelerated over the past few months,” stated Delfin’s CEO, Dudley Poston. “As a modular project that can make FID in 3.5 [mn tpy] increments, this agree- ment materially advances our first vessel’s path towards FID later this year.”
Centrica’s group CEO, Chris O’Shea, talked up the potential for US LNG to bolster energy security as Europe continues to feel the impact of the war in Ukraine and its resulting pivot away from Russian gas.
“Natural gas has now been recognised as an essential transition fuel on the path to net zero just at the point when geopolitical uncertainty is impacting the global gas market,” O’Shea said. “Additional US gas export capacity will help increase UK, European and global energy secu- rity, reflecting the increasing importance of LNG intheglobalgassupplychain.”
Delfin recently asked the US Federal Energy Regulatory Commission (FERC) for a one-year extension to build onshore infrastructure that would connect to the FLNG terminal. While this was the fourth time the company had requested an extension, it cited recent progress, including a binding supply agreement struck with Vitol, as evidence that the project was viable and moving forward.™
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w w w . N E W S B A S E . c o m Week 32 12•August•2022