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November 20-21, 2014

UK’s Centrica to import Sabine Pass LNG

The UK is going to import U.S. shale gas under a new deal between Britain’s Centrica and U.S.-based Cheniere EnergyReuters reported. The two companies signed an agreement for the supply of LNG from Cheniere Energy’s Sabine Pass LNG facility in Louisiana for 20 years starting in late 2018. UK prices of natural gas have increased in recent years due to shortages. The deal is the first for Britain and a breakthrough for U.S. gas in Europe, the report said. UK Prime Minister David Cameron welcomed the deal, stating that it allows for the diversification the UK’s energy mix away from dependency on a small group of existing suppliers. The country currently relies on Qatar for much of its LNG. High LNG prices in Asia have seen supplies earmarked for the domestic market diverted to Japan and South Korea, depleting strategic stockpiles and sending prices to record highs.

Centrica will buy 1.75 million tonnes per annum from the Sabine Pass export plant, equivalent to the annual gas demand of some 1.8 million British homes, Centrica said. The 20-year contract has an option for a 10 year extension. Under the terms , Centrica will retain destination rights for the cargos, allowing it to divert cargos to other markets during times of low demand.


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