REG-Centrica plc Re Contract

Mon Mar 25, 2013 3:00am EDT

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LONDON--(Business Wire)--


25 March 2013

Centrica signs long-term North American LNG export contract with Cheniere

Centrica plc has entered into an agreement with Cheniere Energy Partners, L.P,
to purchase 91,250,000 mmbtu (89 billion cubic feet) of annual liquefied natural
gas (LNG) volumes for export from the Sabine Pass liquefaction plant in
Louisiana in the United States. This amounts to approximately 1.75 million
metric tonnes per annum (mmtpa), and is the equivalent of the annual gas demand
of around 1.8 million UK homes. The contract is for an initial 20 year period,
with the option for a 10 year extension, and the target date for first
commercial delivery is September 2018. 

Under the terms of the agreement, Centrica will purchase LNG on a `Free on
Board` (FOB) basis, giving it destination rights for the cargoes, for a purchase
price indexed to the Henry Hub natural gas price plus a fixed component.
Centrica will export gas from the fifth LNG train at Sabine Pass, on which
preliminary engineering work has already begun. The contract is subject to a
number of conditions precedent, including Cheniere receiving the necessary
regulatory approvals, securing finance, making a final investment decision and
issuing a notice to proceed with the fifth LNG train. 

Sam Laidlaw, Chief Executive of Centrica, said: "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." 

UK Prime Minister, David Cameron, said "I warmly welcome this commercial
agreement between Centrica and Cheniere. 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." 

UK Secretary of State for Energy and Climate Change, Ed Davey, said "Security of
UK energy supply lies in diversity so I am pleased that Centrica has announced
today that it has secured a long-term North American liquefied natural gas
export contract with Cheniere Energy Partners. The UK already receives gas from
a range of countries and we can now add the US to Norway, the Netherlands and
Qatar as sources of supply." 

- ends -

 Enquiries:                                       
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Notes to Editors:

* Sabine Liquefaction is currently developing six liquefaction trains, each with
nominal capacity of approximately 4.5 mmtpa, adjacent to the Sabine Pass LNG
terminal. Sabine Liquefaction has commenced construction of the first two trains
and expects to commence construction of the third and fourth trains in 2013. The
permitting process and preliminary engineering have been initiated for the fifth
and sixth trains. 
* Under the terms of the agreement, Centrica will pay Cheniere a fixed fee of
$3.00/mmbtu plus a commodity fee of 115% of the prevailing Henry Hub price, for
the procurement and liquefaction of the gas. 
* Centrica has the right to 5.8 billion cubic meters (bcm) (205bcf) of import
capacity annually at National Grid`s Isle of Grain LNG terminal in Kent. 
* In February 2011, Centrica announced it had entered into a 3 year agreement
with Qatargas to deliver 2.4 mmtpa (approximately 120bcf) of LNG to the UK. 
* In November 2011, Centrica extended its existing supply agreement with
Statoil, signing a new 10 year supply contract to bring 5bcm (177bcf) of piped
gas per annum to the UK from Norway from 2015.

Centrica plc 

Copyright Business Wire 2013