Shipping Liquefied Natural Gas (LNG) – where the gas is cooled to minus 161 degrees Celsius to liquid form - is an increasingly important part of how Centrica is working to support the wider global market.
Taking the stage at CERA Week's Gas Day this week, Centrica's Co-Managing Director for Energy Marketing and Trading, Jonathan Westby joined a panel to explore the role of Europe as part of the global LNG market.
He said: "As a region, Europe's position in LNG has historically been understated but I believe that the region is very important for the market and that's something that is only going to increase as more projects come online.
"We expect the growth of gas in Europe to be pretty flat for the next few years but the scale of the market is nonetheless significant and can play a key role in providing flexibility to the global market.
"We expect to see a period of oversupply so what that means in practice is a combination of shipped LNG and indigenous piped gas that will find a home in Europe. It is the flexibility of the region's infrastructure that is likely to be of considerable value as we can provide a route to market for gas that would otherwise be stranded.
"An example of this in action was this winter when we saw increased flows to Spain when the country was struggling to cope with intermittent electricity generation from their hydro and wind facilities, driving the need for gas to step in to fill the gap.
"The Fukushima nuclear incident in 2011 saw the reverse of this with a big call for gas to move from the Atlantic into the Asian market as nuclear generation was largely switched off throughout the region.
"In summary, I believe that Europe will take centre stage in the next phase of LNG market development, and that we will see an increasing number of market entrants as participants are forced to innovate from traditional business models to balance their portfolios. This is an area we are well placed to help in terms of understanding the interplay between LNG and pipeline markets."
Centrica's role in the global market
Centrica has a strong legacy in LNG having played an instrumental role in bringing the world's first shipment of gas from the Gulf of Mexico to Canvey Island in the UK in the 1950s as British Gas.
Today, we are playing an increasing part in the global LNG market through a variety of strategic activities including a five year deal with the world's largest buyer of LNG that will see us purchase up to six cargoes a year at the Isle of Grain terminal from 2019. A seven year deal to charter a new-build 180,000 cubic meter LNG carrier is also set to start in the same year.
Centrica is also playing a key part in providing route to market services for renewable generators through Neas Energy, one of Europe’s leading providers of energy management and revenue optimisation services for decentralised third-party owned asset. The business provides customers with route to market and short-term trading optimisation services in six European countries. Combined, these customers own 2,500 individual decentralised assets, including wind farms, solar plants and combined heat and power (CHP) plants, with an installed capacity of approximately 8,600MW.
For more information contact: Emily Highmore-Talbot on 07557 614936 or email firstname.lastname@example.org