Centrica secures 10-year US gas supply deal with Devon Energy and acquires Isle of Grain LNG terminal for £1.5bn.
Centrica plc, a leading UK-based energy services and solutions provider, has announced that its trading division, Centrica Energy, has finalized a long-term natural gas sale and purchase agreement with Devon Energy Corporation, a US-based independent energy producer. This new partnership underlines Centrica’s growing role in securing reliable and competitively priced energy supplies while enhancing its international energy trading portfolio.
As part of the deal, Devon Energy will deliver 50,000 million British thermal units (MMBtu) of natural gas per day to Centrica over a 10-year period, beginning in 2028. This supply volume is the equivalent of approximately five liquefied natural gas (LNG) cargoes annually. The agreed gas volumes will be priced against the European gas hub benchmark, known as Title Transfer Facility (TTF), ensuring that Centrica’s LNG business remains aligned with European market conditions.
This arrangement provides dual benefits: Centrica reduces its exposure to fluctuations in global market prices by aligning feed gas costs with European pricing structures, while Devon Energy gains valuable access to international market pricing. Such a strategy strengthens Centrica’s LNG portfolio by supporting predictable supply and offering Devon an opportunity to diversify its price exposure outside of the US market.
Chris O’Shea, Chief Executive of Centrica Group, emphasized the importance of the agreement, stating that natural gas continues to be a crucial transitional fuel as the world shifts toward more sustainable energy solutions. He highlighted that long-term supply agreements such as this one ensure Centrica’s access to competitively priced gas while deepening energy trade ties between the United States and the United Kingdom.
The execution of physical volumes related to this deal in the US will be managed by Centrica Energy’s American subsidiary. The company recently opened a new office in New York to strengthen its trading capabilities, optimize LNG flows, and further expand its presence in North America. This development demonstrates Centrica Energy’s forward-looking approach to establishing strong international partnerships while enhancing operational efficiency.
This latest deal with Devon Energy comes on the heels of similar long-term agreements that Centrica has entered into over the past few years. Collectively, these moves underscore Centrica’s commitment to innovation in LNG trading and its broader strategy to secure sustainable energy supplies for the future.
In addition to the Devon Energy contract, Centrica made another significant announcement this week. The company, in collaboration with Energy Capital Partners LLP, has successfully acquired the Isle of Grain liquefied natural gas terminal (“Grain LNG”) from the National Grid group. The acquisition, valued at £1.5 billion on an enterprise basis, positions Centrica to play an even larger role in LNG storage and regasification infrastructure in the UK. Grain LNG is a strategically important terminal and one of the largest in Europe, making this acquisition a key milestone in Centrica’s long-term energy investment strategy.
Through both the LNG supply agreement with Devon Energy and the Grain LNG acquisition, Centrica is reinforcing its ambition to be at the forefront of Europe’s energy security and the transition toward a lower-carbon future.
