Centrica Energy Signs Natural Gas Deal with U.S.-based Devon Energy Corporation
Centrica Energy, the trading arm of the U.K.’s energy company Centrica, has recently inked a significant natural gas sale and purchase agreement (SPA) with U.S.-based Devon Energy Corporation.
Under the terms of the agreement, Devon Energy is slated to supply Centrica with 50,000 million British thermal units (MMBtu) per day of natural gas, which equates to approximately five LNG cargoes annually, for a duration of 10 years starting in 2028. The pricing of the volumes will be linked to the European gas hub price (TTF), providing Devon Energy with exposure to international gas prices.
Chris O’Shea, Group Chief Executive of Centrica, expressed his thoughts on the deal, stating: “Gas remains an essential transition fuel and, through long-term agreements like this, Centrica ensures competitively‑indexed gas supply for our LNG business and builds on the deep and important energy trade links between the US and the UK.”
Centrica views this agreement as a strategic move in line with its goal of managing market price risk within its LNG portfolio by aligning feed gas pricing with European market rates. The operational aspects of this deal in the U.S. will be overseen and optimized by Centrica’s subsidiary, which recently established an office in New York.
This development follows Centrica’s recent acquisition of the U.K.’s Grain LNG terminal from the National Grid group through a partnership with U.S. investment firm Energy Capital Partners (ECP). The Grain LNG terminal, touted as Europe’s largest LNG regasification facility, boasts an impressive capacity of 15 million tonnes of LNG per year.