Centrica would purchase one million tonnes per annum (MTPA) of LNG for 15 years on a free on board (FOB) basis starting from 2026, at the Delfin Deepwater Port, off the coast of Louisiana, US


Centrica to buy LNG from Delfin. (Credit: Centrica plc)

UK-based energy and services company Centrica has signed a £7bn agreement with US-based Delfin Midstream to procure liquefied natural gas (LNG).

Under the terms of the agreement, Centrica would purchase one million tonnes per annum (MTPA) of LNG for 15 years on a free on board (FOB) basis.

The LNG supply is expected to start from 2026, at the Delfin Deepwater Port, which is located 40 nautical miles off the coast of Louisiana, US.

The deal provides an opportunity for Delfin to reach a Final Investment Decision (FID) for its US floating LNG export facility by this year-end, with plans to begin operations in 2026.

Delfin CEO Dudley Poston said: “We are very pleased to enter into this agreement with Centrica and continue to rapidly advance Delfin’s position as a leading source of reliable low-cost energy from the safety of the US at compelling prices.

“Market demand for long-term LNG continues to be strong and buying activity from Europe and various other geographies has accelerated over the past few months.

“As a modular project that can make FID in 3.5 MTPA increments, this agreement materially advances our first vessel’s path towards FID later this year.”

Centrica said that it has been working to boost the UK and Ireland’s energy security, in a challenging geopolitical and macroeconomic environment.

Last month, the company signed a £4bn supply agreement with Equinor to procure LNG for additional 4.5 million UK homes through to 2025.

Together with the current agreement with Delfin, its deals would support the expansion of US LNG export capacity, an important source of reliable future gas supply, said Centrica.

Centrica Group chief executive Chris O’Shea said: “Natural gas has now been recognised as an essential transition fuel on the path to net zero just at the point geopolitical uncertainty is impacting the global gas market.

“Additional US gas export capacity will help increase the UK, European and global energy security, reflecting the increasing importance of LNG in the global gas supply chain.

“I’m delighted to sign this Heads of Agreement with Delfin as we continue to deliver our new strategy, growing Centrica’s LNG portfolio and ensuring that we increase our access to a diversified range of reliable gas supplies for our customers.”

Last month, Delfin finalised an LNG sale and purchase agreement with Vitol to supply 0.5 MTPA on a FOB basis for 15 years.