Photo: Courtesy of Delfin LNG

Centrica to buy LNG from Delfin Midstream

UK-based energy services and solutions provider Centrica has signed a deal with U.S. LNG export projects developer Delfin Midstream to buy LNG.

Centrica to buy LNG from Delfin Midstream
Courtesy of Delfin LNG

On 9 August, Centrica and Delfin Midstream announced the signing of a heads of agreement. Under the HOA, Centrica will purchase 1.0 million tonnes per annum (mtpa) of LNG for 15-years on a free on board (FOB) basis at the Delfin Deepwater Port, located off the coast of Louisiana.

This deal provides Delfin with another key foundation customer which will facilitate a final investment decision (FID) for the first floating LNG export facility in the U.S. by the end of this year, with operations expected to commence in 2026.

“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,” said Dudley Poston, CEO of Delfin.

Centrica said it has been working to bolster the UK and Ireland’s energy security both now and over the longer term. Last monthit signed an additional £4bn supply agreement with Equinor, and this £7bn agreement with Delfin, which starts in 2026, will underpin the expansion of U.S. LNG export capacity.

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“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 U.S. gas export capacity will help increase UK, European and global energy security, reflecting the increasing importance of LNG in the global gas supply chain,” said Chris O’Shea, Centrica Group chief executive.

“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 U.S. – for many years to come,” concluded Kwasi Kwarteng, UK Secretary of State for Business and Energy.