Centrica, an integrated energy company primarily operating in the UK and Ireland, has signed a 20-year contract to supply liquefied natural gas (LNG) with the multi-billion dollar LNG Ksi Lisims project being developed on the northwestern coast of Canada.
Contract Details
Centrica and Ksi Lisims LNG have signed a Heads of Agreement (HOA) for the sale and purchase of 1 million tons per year of LNG on an FOB basis. The project is developing a floating export facility with a capacity of 12 million tons per year in British Columbia and is designed to be one of the LNG facilities with the lowest greenhouse gas emissions in the world.
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This contract, which is subject to the completion of a Sale and Purchase Agreement (SPA), strengthens the sustainability of this European company's LNG portfolio and ensures the supply of its customers amid ongoing instability in global energy markets.
Canada's Role in Energy Supply
Chris O'Shea, CEO of Centrica Group, stated: "Energy security is more important than ever. Gas will continue to play a vital role in the energy transition, and this agreement adds reliable, long-term LNG supply to our global portfolio, allowing our customers worldwide to access the energy they need at the right time and place."
Ksi Lisims LNG has signed long-term supply agreements on the northwestern coast of British Columbia and currently covers 9 million tons of its planned 12 million ton capacity. This export facility is being developed in collaboration with the Nisga'a Nation, Rockies LNG, and Western LNG.
Sustainable Projects and Carbon Reduction
Davis Thomas, President and Founder of Western LNG, remarked: "Centrica, through its subsidiary British Gas, is the largest supplier of domestic natural gas in the UK and has played a central role in the UK energy system for generations. We are pleased to have signed this initial agreement with Centrica and look forward to finalizing a definitive SPA in the coming months."
The developers of this project emphasize that it is designed to be one of the LNG projects with the lowest greenhouse gas emissions in the world, powered by renewable hydroelectric energy. This project utilizes the British Columbia power grid to provide liquefaction power and can reduce carbon intensity by up to 90% compared to traditional facilities.
With key environmental approvals and the project's status as a national project from the Canadian government, construction of this project may begin soon, possibly next year, subject to a final investment decision (FID), and the first volumes of LNG are expected to be delivered to the market in the early 2030s.
Tim Hudgson, Minister of Energy and Natural Resources for the Government of Canada, stated: "Canada is building the necessary infrastructure to become an energy superpower and a preferred supplier for its allies around the world. This agreement is a strong vote of confidence in Ksi Lisims LNG."
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