Centrica secures contract to develop gas reception facility

Centrica plc today announced it has been awarded a contract from the partners of the Ormen Lange field, offshore Norway, to develop and operate a new gas pipeline reception facility adjacent to its Easington terminal, which will receive gas imported primarily from the Norwegian sector.

Centrica will make no initial capital investment but will utilise the expertise from the existing Easington gas operations, which support its Rough storage facilities. Acting on behalf of the Ormen Lange partners, Centrica will receive a fee for the provision of support and management services for the design, construction and commissioning of the new import terminal and subsequent operations and maintenance. The new pipeline and terminal will improve the UK’s security of supply position, having the capability of importing approximately 70 million standard cubic metres of gas per day (approximately 12 per cent of UK peak demand) into the National Transmission System.

Under the contract, Centrica will physically operate the new terminal when it is completed in late 2006, with a view to continuing to do so over the longer term, dependent on Ormen Lange partner approval.

First gas is expected from the Norwegian sector in late 2006, with first gas from the Ormen Lange development scheduled for late 2007. The new terminal is expected to be operational for 50 years, enhancing Easington’s potential as a trading hub for gas imported to the UK from Norway and further afield. The proposed project is conditional upon the receipt of various regulatory and planning consents including an agreement between the UK and Norwegian governments in respect of the construction and operation of the pipeline.

Under a separate long term supply agreement signed in 2002, Statoil is expected to use the new pipeline to deliver gas to Centrica.

Jake Ulrich, Managing Director, Centrica Energy Management Group, said: “This contract enables us to take advantage of the strengths of the Easington team to bring in additional revenue without the need for capital outlay.

“We are particularly pleased to be playing a key role in supporting new infrastructure which will offer improved security of supply for the UK and Centrica customers.”