The owner of British Gas has signed an import deal with a US energy firm for liquefied natural gas (LNG) in a bid to ensure the UK’s energy security.
The 20-year agreement includes the purchase of 89 billion cubic feet of annual LNG volumes for export from Cheniere Energy Partners’ Sabine Pass plant in Louisiana. It is equivalent to the gas demand of around 1.8 million UK homes every year.
Prime Minister David Cameron welcomed the deal and said future gas supplies from the US would help diversify the UK’s energy mix and provide consumers with a new “long term, secure and affordable source of fuel”.
Sam Laidlaw, Chief Executive of Centrica added: “In an increasingly global gas market, this landmark agreement represents a significant step forward in our strategy, enabling Centrica to strengthen its position along the gas value chain and helping to ensure the UK’s future energy security. We are therefore very pleased to have signed this agreement and look forward to working with Cheniere.”
The contract includes the option for a 10-year extension and the target date for first commercial delivery is September 2018.
The news follows reports last week about Britain facing a potential gas supply crisis, which were denied by the Department of Energy and Climate Change.