Business
Devon Energy and Centrica Finalize $2 Billion LNG Supply Agreement

Devon Energy Corporation, based in the United States, has secured a significant natural gas supply agreement with Centrica, the parent company of British Gas. The ten-year deal, announced on March 15, 2024, will see Devon Energy provide 50,000 MMBtu of liquefied natural gas (LNG) each day, starting in 2028. This volume translates to approximately five LNG cargoes annually.
Under the terms of the agreement, the LNG pricing will be indexed to the European gas hub price, known as TTF. Centrica indicated that this arrangement aims to mitigate market price risks associated with its LNG portfolio, aligning feed gas pricing with European market rates while simultaneously granting Devon Energy exposure to international prices.
Strategic Importance of the Agreement
Chris O’Shea, Group Chief Executive of Centrica, stated, “Gas remains an essential transition fuel, and through long-term agreements like this, Centrica ensures competitively indexed gas supply for our LNG business and builds on the deep and important energy trade links between the US and the UK.”
Centrica’s U.S. subsidiary will manage the physical volumes outlined in this deal, with operations optimized from their newly established office in New York. This contract marks Centrica’s continued efforts to diversify its natural gas sources, following a similar agreement with Coterra Energy at the end of 2023. In that arrangement, Coterra will supply 100,000 MMBtu of natural gas per day, also linked to European gas prices, for a ten-year term beginning in 2028.
Expanding Energy Infrastructure Investments
The announcement of the agreement with Devon Energy coincides with Centrica’s recent partnership with investment firm Energy Capital Partners LLP. This collaboration aims to acquire the UK’s largest LNG import terminal, located at the Isle of Grain, for an enterprise value of $2 billion (£1.5 billion).
Centrica’s investment in Grain LNG aligns with its strategy to build critical energy infrastructure assets that support the energy transition, generate attractive returns, and create future growth opportunities across its broader portfolio.
By securing these agreements, both Devon Energy and Centrica are positioning themselves strategically in the evolving global energy landscape, emphasizing the importance of reliable and competitively priced natural gas.
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