Centrica plc today announced it has secured the UK’s first major long term liquefied natural gas (LNG) contract with Asean LNG Trading Company Limited, a subsidiary of Petronas. The 15 year supply deal will deliver over 45 billion cubic metres (bcm) of gas to British Gas customers over the contract term, more than enough to supply all the UK’s homes for a year.
Volumes will increase during the life of the contract, which could eventually represent a value in the region of £4 billion, with an average of 3 billion cubic metres (bcm) being delivered annually. The contract, which is linked to UK market prices, will commence within a timeframe of 1 October 2007 and 1 October 2008 and builds on Centrica’s strategy of purchasing gas from diverse sources and enhancing security of supply for its British Gas customers in the coming years.
Petronas, the state oil and gas company of Malaysia, will deliver gas to Centrica via the new BG/Petronas/Petroplus "Dragon" terminal at Milford Haven, South Wales, in which it holds 50 per cent of the throughput capacity.
Together with Centrica’s long term agreements signed with Statoil and Gasunie in 2002, the contract will help underpin the substantial investment required to bring new sources of gas to the UK in the coming years. Centrica expects LNG to play an increased role in the UK market and plans to source LNG through contracts and potential investments in equity projects.
Sir Roy Gardner, Chief Executive of Centrica, said: "We are the first UK company to sign a contract of such size and duration for this market, which demonstrates our commitment to secure gas for our British Gas customers from a diverse range of sources in the years ahead.
"This agreement will build on our balanced portfolio of contracts, equity production and gas purchased on the traded market. The contract will also help to underpin some of the investment required in LNG infrastructure which Centrica views as a key part of the UK’s future energy needs."