Centrica inks deal to buy LNG from Delfin

Delfin Midstream, the developer of a floating LNG export project in the Gulf of Mexico, has signed a heads of agreement to supply liquefied natural gas to UK-based energy firm Centrica.

Under the deal, Centrica would buy 1 million tonnes per annum of LNG for 15-years on a free on board basis at the Delfin Deepwater Port, located off the coast of Louisiana.

This agreement provides Delfin with another key foundation customer which would facilitate a final investment decision (FID) for the floating LNG export facility by the end of this year, with operations expected to commence in 2026, according to a joint statement.

The LNG supplies would start in 2026.

Prior to this, Delfin signed a deal with a unit of energy trader Vitol.

“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,” Dudley Poston, CEO of Delfin said.

“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,” Poston said.

Deal worth about $8.48 billion

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, the statement said.

The firm recently signed an additional supply agreement with Equinor to supply 4.5 million UK homes through to 2025, and now signed this deal with Delfin to grow its LNG portfolio.

According to the statement, the new deal with Delfin is worth 7 billion pounds ($8.48 billion).

“Natural gas has now been recognized as an essential transition fuel on the path to net zero just at the point geopolitical uncertainty is impacting the global gas market,” Chris O’Shea, Centrica chief executive said.

“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,” O’Shea said.

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