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Centrica plc is an integrated energy company operating predominately in United Kingdom and North America. In the United Kingdom, it operates three segments: upstream, downstream and storage.
Centrica acquires stake in gas development block in Trinidad from Canadian Superior EnergyJune 02 2009, 8:24am
British Gas parent company, Centrica plc (LSE: CNA) continues to expand its presence in the rapidly emerging Liquefied Natural Gas (‘LNG’) sector. This morning the FTSE 100 constituent announced that it would pay £87 million in cash for a 45% stake in a gas development block in Trinidad for “future LNG supplies”.
Block 5(c) is located off the south-east coast of Trinidad and is currently operated by BG Group, who holds a 30% stake. Centrica is acquiring the 45% stake from Canadian energy group, Canadian Superior Energy Inc (TSX: SNG). Centrica has an existing position in Trinidad and Tobago through an equity interest in Block 2(ab).
Recoverable reserves attributable to the 45% stake in the block are an impressive 650 billion cubic feet (‘bcf’), which Centrica noted was equivalent to half of its entire gas reserves in the UK.
“This acquisition would provide Centrica with a material gas position in Trinidad which is close to existing gas pipeline infrastructure and Liquefied Natural Gas (LNG) export facilities,” the company said. “The gas could supply Centrica customers in the UK, with additional optionality provided by Centrica’s North American customer base and the opportunity to sell into other Atlantic Basin markets. “
Centrica expects gas production to commence from Block 5(c) as early as 2014, subject to development plan approval. The capital expenditure (‘capex’) attributable to Centrica’s 45% stake is estimated to be around £400 million.
Sam Laidlaw, Chief Executive of Centrica, said: “Trinidad is one of the key export areas for Atlantic Basin LNG with substantial available reserves and infrastructure in place. Gas produced from this block could help address our long-term structural hedge position by reducing our exposure to volatile wholesale gas prices, offering a potential future gas supply option for our British Gas customers in the UK and for our Direct Energy customers in North America.”