Centrica signs landmark shale deal in the US

BRITISH Gas owner Centrica yesterday moved to diversify the UK’s energy mix as it said it had signed a landmark liquefied natural gas (LNG) import deal with North America-based Cheniere Energy.

Under the terms of the agreement, Centrica will buy around 1.75m metric tonnes a year – or 89bn cubic feet – of LNG for a 20-year period from the Sabine Pass plant in Louisiana.

The deal, which is due to deliver its first shipment in September 2018, will deliver the gas equivalent to power around 1.8m UK homes.

Additionally, energy giant Centrica will retain destination rights for the US shipments, meaning it could divert them to other markets during times of low UK demand or high prices elsewhere.

It marks the first deal of its kind for a UK supplier looking to move into cheap US shale gas. The UK currently gets its gas supplies from Qatar, Norway and the Netherlands, although it depends increasingly on LNG from Qatar to plug the growing energy supply deficit.

“Future gas supplies from the US will help diversify our energy mix and provide British consumers with a new long-term, secure and affordable source of fuel,” said Prime Minister David Cameron yesterday, welcoming the announcement.

It comes as the UK turned to Qatar and Trinidad to replenish gas reserves depleted by the extended cold weather, with the first shipments due to arrive this week.