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US Shale Gas To Heat UK Homes

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Szu Ping Chan and Emily Gosden, The Daily Telegraph

Centrica has struck a £10bn gas supply deal that could see US shale gas heating British homes by 2018.

Centrica said the 20-year deal with Cheniere Energy Partners would allow it to export enough liquefied natural gas from the US to supply 1.8m British homes each year.

“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,” said Sam Laidlaw, Centrica’s chief executive.

Prime Minister David Cameron welcomed the deal, claiming: “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.”

However, Centrica is under no obligation to sell the gas to the UK and analysts said that at current market prices it would be more likely to deliver the gas to Asian markets, where prices are higher.

With the first shipments not due from the Louisiana-based plant until 2018, the deal will do nothing to relieve the current strained gas supplies caused by a colder than expected winter.

A faulty pump at the Interconnector, one of Britain’s main gas pipelines, caused an eight hour shutdown last Friday. The closure led to a 50pc spike in gas prices, and analysts warned that higher energy bills for consumers or even gas rationing for big businesses were possibilities if the cold weather continued.

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