Centrica has welcomed the news that Cheniere Energy has secured the required regulatory approvals and taken the final investment decision (FID) to proceed with the construction of the fifth LNG train at the Sabine Pass liquefaction plant in Louisiana, USA.
In March 2013, Centrica entered into an agreement with Cheniere to purchase 91 250 000 million Btu per year of LNG from the liquefaction plant.
Importance of LNG
Jonathan Westby, Global Head of LNG for Centrica Plc, said: “The agreement with Cheniere represents a very significant step forward in Centrica’s LNG business. The contract will provide us with an enhanced capability in managing market risk, trading and asset optimisation whilst ensuring a long-term secure source of supply. This will further support the growth of our portfolio, placing us in a very strong position to capitalise on further opportunities within the rapidly developing global LNG market”.
He continued: “This has been an important strategic year for our LNG business; we have completed a number of free on board cargo deliveries and we’ve continued to build a high performing team that’s attracting the best talent in the LNG market. The completion of the Cheniere deal recognises the important future role LNG will play in Centrica’s midstream business.”
Centrica will purchase the LNG on a ‘Free on Board’ (FOB) basis, giving it destination rights for the cargoes. The target date for first commercial delivery is 4Q18.
Edited from press release by Callum O'Reilly