Centrica Energy, the trading arm of the U.K.’s energy company Centrica, has signed a natural gas sale and purchase agreement (SPA) with U.S.-based Devon Energy Corporation.
Devon is set to deliver 50,000 million British thermal units (MMBtu) per day of natural gas – equivalent to five liquefied natural gas (LNG) cargoes per year – to Centrica under the 10-year deal starting in 2028. The volumes will be indexed to the European gas hub price (TTF), providing Devon with international price exposure.
Chris O’Shea , Group Chief Executive of Centrica, commented: “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.”
Centrica says the deal is in line with its objective of managing market price risk in its LNG portfolio by aligning feed gas pricing with European prices. The physical volumes of this deal in the U.S. will be handled and optimized by the firm’s subsidiary, which recently announced the opening of an office in New York.
This comes on the heels of Centrica’s deal with U.S. investment firm Energy Capital Partners (ECP) to acquire the U.K.’s Grain LNG terminal from the National Grid group. The U.K. player described the terminal as Europe’s largest LNG regasification facility, boasting a capacity of 15 million tonnes of LNG a year.