Centrica has signed its first long-term LNG supply contract in China, the world’s second largest importer, UK energy company confirmed Wednesday.
It has agreed a binding 15-year sales and purchase agreement (SPA) to supply 500,000 tonnes per annum (mtpa) of LNG to the Shenergy Group.
London-listed Centrica said the SPA follows a heads of agreement that was concluded in January 2020. Deliveries of LNG are expected to commence in 2024.
“We are delighted to conclude this agreement with Shenergy,” Centrica chief executive Chris O’Shea said in a statement.
“The roots of our shared history date back over 150 years, to when British Gas helped install gas lighting in the streets of Shanghai.
“Today’s deal is a new milestone for our companies and complements Centrica’s existing portfolio of LNG positions and contracts.”
Centrica energy trading arm trades gas, power and LNG and employs around 600 people from offices in the UK, Denmark, Germany, Sweden and Singapore.
The company says shipping LNG is an “increasingly important” part of how Centrica is “working to secure energy needs for its customers”.
This year the company has taken delivery of two 180,000-cbm LNG carrier newbuildings - the GasLog Windsor and GasLog Westminster - on long-term charters from Peter Livanos-backed GasLog.
This is the second long-term supply deal Shenergy, which is a is a state-owned enterprise owned by the Shanghai government, has signed this year.
In January it also signed a heads of agreement with Malaysian LNG giant Petronas to supply 1.5 mtpa of LNG to Shenergy’s Wuhaogou receiving terminal in China.
The LNG supply agreement is for a 12-year term with deliveries due to start starting from 2022 using new mid-sized LNG vessels.
In February K Line confirmed that it had ordered two 79,960-cbm dual-fuel LNG carriers at China’s Hudong-Zhonghua Shipbuilding on the back of the charter from Petronas.
The midsize LNG carriers contracted by Petronas are something of a rarity in the LNG fleet, which mainly comprises vessels of 140,000 cbm or larger.
