UK utility Centrica has signed a non-binding heads of agreement for 1mn t/yr of supply from Canada's proposed 12mn t/yr (1.6bn ft³/d) Ksi Lisims LNG export terminal in British Columbia, the companies announced today.
Ksi Lisims has now allotted to customers 9mn t/yr, or 75pc of its nameplate capacity, as the project works toward a final investment decision by the end of the year. Shell, TotalEnergies and Uniper each have signed binding agreements for 2mn t/yr, and Sefe and Santos have signed preliminary deals for 1mn t/yr.
Ksi Lisims is planned to consist of two 6mn t/yr floating LNG (FLNG) units in northwest British Columbia. The project is being developed by the Nisga'a Nation, Houston-based Western LNG and a consortium of Canadian gas producers called Rockies LNG.
Western LNG hopes to convert the Centrica deal into a binding sales and purchase agreement "in the coming months", chief executive David Thames said in a press release.
Centrica has gas purchase agreements with Canadian producers Peyto, Whitecap and Tourmaline, each equal to about five LNG cargoes per year, under contracts linked to the Dutch TTF price. The 10-year agreements, starting in 2028-2029, help reduce Centrica's exposure to cross-hub basis risk by linking the purchase price of gas with the same index on which it is intended to be sold as LNG. At least two of the contracts specifically state the gas will be delivered to Centrica at western Canada's AECO hub.
Ksi Lisims will be located far from Centrica's European import market. But fellow European offtaker Sefe has been heard to be exploring options for Panama Canal transits, a move that Centrica may consider. And Centrica could use Canadian LNG in swaps with Asian buyers for cargoes from other origins.
