Centrica Energy, the energy trading and optimisation arm of Centrica, has announced the signing of a long-term natural gas purchase agreement with Peyto Exploration & Development Corp., a leading Canadian natural gas producer.
Under the agreement, Peyto will deliver 50,000 MMBtu of natural gas per day to Centrica Energy over a 10-year period from 2029, equivalent to approximately five LNG cargoes annually.
Deliveries will be made at the NIT 'AECO' hub operated by TC Energy in Alberta, Canada. The gas will be priced against the Title Transfer Facility (TTF), the benchmark for European gas markets. This agreement supports Centrica Energy’s strategy of strengthening its LNG portfolio through long-term, LNG-linked gas supply arrangements.
By linking feed gas pricing to European benchmarks and maintaining flexibility across global markets, the deal enhances Centrica Energy’s ability to manage market exposure and optimise its LNG portfolio.
Through its LNG trading and optimisation capabilities, including global desks operating across key markets, Centrica Energy will continue to optimise LNG cargo flows while mitigating price risk across the trading hubs and providing security of supply to our customers globally.
Cassim Mangerah, Managing Director of Centrica Energy, said, 'This agreement with Peyto represents another important step in strengthening our integrated LNG portfolio. By securing long-term, LNG-linked gas supply from a reliable Canadian partner, we continue to enhance our ability to manage price risk, optimise global cargo flows and deliver flexible, competitive energy solutions to our customers. Partnerships like this are central to our strategy of building a diversified and resilient gas portfolio that can respond to evolving global market dynamics.'
For Peyto, the agreement provides long-term access to international LNG-linked pricing, supporting its strategy to diversify market exposure beyond North American benchmarks.
Jean-Paul Lachance, President & CEO of Peyto, said, 'We're excited to partner with Centrica Energy, a global leader in energy trading, for a natural gas supply agreement linked to LNG pricing. Diversifying our natural gas sales to premium demand markets has been a core strategy for Peyto and this agreement provides us with our first exposure to the European market.'
Source: Centrica
