Centrica almost triples UK gas supply volume
THE UK’s dependency on gas from Russia just increased, after Centrica signed a deal with state-owned giant Gazprom to ramp up the amount of energy it buys from the firm.
Centrica has increased the volume of gas it is buying from Norway’s Statoil as well.
Centrica, which owns British Gas, first struck a deal with Statoil in 2011, signing a 10 year agreement for the supply of 5bn cubic metres (bcm) of gas per annum to be delivered to the UK.
That contract is due to kick off in October this year. The new agreement, announced yesterday, increases the volume of gas by a further 2.3bcm per annum, taking the total amount of gas to be delivered to 73bcm over 10 years.
Centrica extended its deal with Gazprom’s UK subsidiary Gazprom Marketing & Trading (GM&T).
The firm increased the average volume of gas it is buying from the Russian group to 29.1bcm per annum, up from 4.16bcm as agreed in 2012.
The original GM&T contract began last year, with the new terms coming into effect this year. The updated deal will run until 2021.
According to Centrica, Britain needs around 70 bcm of natural gas each year to heat homes and businesses and to generate electricity, and now needs to import more than half of this.
Centrica said its updated agreements with Statoil and Gazprom will meet the gas needs of 9m British homes every year.
Angelos Anastasiou, utilities analyst at Whitman Howard, said the contract extensions are “sensible moves”.
Anastasiou added: “The value and scale of the contracts is indicative of the importance of Centrica’s position as a key, integrated UK energy supplier.”
Shares in Centrica fell by 0.61 per cent yesterday.