Centrica Signs Deal for US Gas Imports

By Cassie Werber

Centrica PLC (CNA.LN), one of the U.K.'s main energy providers, has signed a deal to buy billions of cubic meters of liquefied natural gas from a U.S. plant, in the first deal clearly intended to bring gas from North America to the U.K.

The contract with Cheniere Energy Partners LP (CQP) will see Centrica import 1.75 million metric tons of gas per year, enough to power around 1.8 million U.K. homes, according to a statement by the firm. It is the first such deal between a U.S. supplier and a U.K. utility.

Sam Laidlaw, Centrica's Chief Executive, said in the statement: "In an increasingly global gas market, this landmark agreement represents a significant step forward in our strategy...helping to ensure the UK's future energy security."

The contract is subject to Cheniere getting the necessary regulatory approval and securing finance before it becomes finalized.

In February, Centrica announced that it would not be participating in a plan to build new nuclear power stations in the U.K., and there has since been speculation as to where it will deploy the cash reserves on its balance sheet. In the company's preliminary results statement the firm indicated that it planned to expand its North American business.

Prime Minister David Cameron welcomed the news, saying in the statement: "Future gas supplies from the US will help diversify our energy mix and provide British consumers with a new long-term, secure and affordable source of fuel."

Energy security in for the U.K. "lies in diversity," according to Ed Davey, the U.K.'s Secretary of State for Energy and Climate Change, also quoted in the release. Mr. Davey noted that the U.K. is already supplied with gas from Norway, the Netherlands and Qatar.

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