Centrica seals £7bn US deal to secure long-term gas supplies

Centrica has stumped up £7billion for a deal to secure long-term supplies of liquefied natural gas (LNG) from US energy infrastructure group Delfin Midstream.

The country’s largest energy supplier, owner of British Gas, will buy 1million tonnes of LNG per year for 15 years from 2026 onwards under the agreement, taking delivery of shipments from a Delfin deepwater port off the coast of Louisiana.

Countries across Europe are scrambling to secure alternative supplies of gas after Russia’s invasion of Ukraine, the freeze on plans to develop the Nord Stream 2 gas pipeline and cuts to the volume of gas flowing through the existing Nord Stream 1 pipeline. 

LNG from the US is seen as a key source of alternative supply in the face of Russian cutbacks. 

The UK has three of the largest LNG facilities in Europe and has served as a vital energy link between US suppliers and European customers.

‘A key component of our energy security strategy is that natural gas is a key transition fuel on the road to clean, affordable, home-grown energy,’ said Business Secretary Kwasi Kwarteng.

Diversifying gas sources has become urgent as renewable energy, which it was hoped would help to cushion the blow of tightening gas supplies, has also been squeezed. 

Norway is curbing its hydropower electricity exports into the rest of Europe until water levels at its reservoirs recover from the lowest levels seen since 1996.