Centrica plc today announced that its subsidiary British Gas Trading Limited (British Gas) has secured a five year flexible supply contract with Shell Energy Europe B.V. (Shell) to deliver gas to Centrica commencing 1 October 2004.
Shell has been contracted to deliver an average total of 4.5 billion cubic metres (bcm) to British Gas over the full five year life of the contract, with flexibility for total volume to be less than or in excess of this figure. The agreement provides significant buyer’s optionality for pricing and volume nomination arrangements and will deliver gas to the UK’s NBP. The contract could represent a total consideration of approximately £300 million.
Jake Ulrich, Managing Director of Centrica Energy, said: "This agreement with Shell marks an important step in Centrica continuing to source gas for our customers from a diverse range of structured contracts, utilising our risk management approach.
"This is an innovative deal which will add to the existing volume under contract in our portfolio, as well as providing for flexibility which assists us in more closely matching our seasonal supply requirements. Centrica and Shell also believe this agreement could act as a valuable platform for further discussions as we look to source gas for our customers from existing and new areas in the years ahead."