Centrica, an integrated energy company operating primarily in the UK and Ireland, has struck a long-term liquefied natural gas deal with a multibillion-dollar LNG project being developed on Canada’s northwest coast to export lower-carbon LNG to energy markets.
Centrica and Ksi Lisims LNG have entered into a heads of agreement (HOA) for the sale and purchase of 1 million tonnes per annum of LNG on a free-on-board basis for 20 years. This is a proposed 12 mtpa floating export facility in British Columbia, designed to be among the world’s lowest-emission LNG facilities.
The deal, which is subject to the completion of a sale and purchase agreement (SPA), strengthens the resilience of the European firm’s LNG portfolio, adding supply for its customers during a time of continued volatility in global energy markets.
Chris O'Shea, Group Chief Executive at Centrica, commented: "Energy security has never mattered more. Gas will continue to play an important role through the energy transition, and this agreement adds reliable, long-term LNG supply to our global portfolio, ensuring our customers around the world get the energy they need, when and where they need it.
“Canada is a stable, responsible energy partner, and Ksi Lisims, with its lower-carbon design and genuine partnership with the Nisga’a Nation, is exactly the kind of project we want to back.”
Ksi Lisims LNG on the northwest coast of British Columbia has now entered into long-term supply agreements, covering 9 mtpa of its planned 12 mtpa capacity. The floating export facility is being developed in partnership between the Nisga'a Nation, Rockies LNG, and Western LNG.
Davis Thames, President, Founder and CEO of Western LNG, said: "Centrica, through its subsidiary British Gas, is the UK's largest supplier of domestic natural gas and has played a central role in the UK's energy system for generations. Serving millions of customers across the UK, it has also built a substantial global LNG portfolio to help ensure long-term security of supply.
“We are pleased to enter into this heads of agreement with Centrica and look forward to completing a definitive SPA in the coming months. The continued interest Ksi Lisims LNG is receiving from major international energy companies demonstrates the project's strong commercial momentum as we advance toward full commercialization and a final investment decision.”
The developer emphasizes that this project, which is to be powered by renewable hydroelectricity, is designed to be one of the world's lowest-emission LNG projects, using renewable hydroelectricity from British Columbia's grid to power liquefaction and cut carbon intensity by up to 90% versus conventional plants.
With key environmental approvals and project of national interest status from the government of Canada already secured, construction could begin as early as next year, subject to a final investment decision (FID), with first LNG volumes expected in the early 2030s.
Tim Hodgson, Minister of Energy and Natural Resources, Government of Canada, stated: “Canada is building the infrastructure we need to become an energy superpower and a supplier of choice to our allies around the world.
“This agreement is another strong vote of confidence in Ksi Lisims LNG — a major, Indigenous-partnered project that opens new markets for Canadian energy, creates good jobs, and strengthens our economy. Our government is focused on getting major projects like this built, so we can diversify our trade, support our allies, and build lasting prosperity for Canadians.”