Business
Devon Energy Secures 10-Year LNG Supply Agreement with Centrica

U.S.-based Devon Energy Corporation has finalized a substantial ten-year agreement to supply liquefied natural gas (LNG) to the UK’s Centrica, which owns British Gas. The deal, announced on Friday, stipulates that Devon Energy will deliver 50,000 million British thermal units (MMBtu) of natural gas per day starting in 2028. This volume translates to approximately five LNG cargoes annually.
The LNG supply will be indexed to the European gas hub price, known as TTF, allowing Centrica to effectively manage market price risks within its LNG portfolio. By aligning feed gas pricing with European gas prices, this agreement also provides Devon Energy with significant international price exposure.
Chris O’Shea, Group Chief Executive of Centrica, emphasized the importance of gas as a transition fuel. He stated, “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 U.S. and the UK.”
Strategic Moves in LNG Supply Chain
Centrica’s U.S. subsidiary will oversee the physical volumes associated with this deal, which is part of a broader strategy to enhance its global energy operations. Recently, Centrica opened a new office in New York to further optimize its engagement in the U.S. market.
The agreement with Devon is not Centrica’s first foray into U.S. gas procurement. In late 2022, the company signed a similar contract with Coterra Energy, which involves the supply of 100,000 MMBtu per day over a ten-year term, also linked to European gas prices. This contract is set to commence in 2028, further solidifying Centrica’s position in the LNG market.
In addition to these agreements, Centrica recently announced a partnership with investment firm Energy Capital Partners LLP to acquire the UK’s largest LNG import terminal located at the Isle of Grain. This acquisition, valued at approximately $2 billion (£1.5 billion), aligns with Centrica’s strategy of investing in essential energy infrastructure that supports the transition to cleaner energy.
Centrica stated that part-owning Grain LNG will enable the company to secure attractive returns while generating regulated or contracted cash flows. This move is also intended to create future options across Centrica’s broader portfolio, highlighting the company’s commitment to evolving in the dynamic energy landscape.
With these strategic agreements and investments, both Devon Energy and Centrica are poised to play crucial roles in the future of the LNG market, reinforcing their operations amid ongoing global energy demands.
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