UK expects to secure US LNG supplies for 20 years

The UK is trying to lock in long-term supplies of liquefied natural gas from US producers ahead of a winter energy crunch that’s threatening to derail the country’s economy, Report informs referring to Bloomberg.

The British government’s task force is requesting proposals from LNG exporters to supply domestic buyers under contracts that would last as long as 20 years, according to people familiar with the matter, who asked not to be named as the discussions are private. A government representative didn’t immediately respond to a request for comment.

The government’s inquiries come as other European nations are also trying to stock up on natural gas ahead of the coldest months and diversify their fuel sources in the long term. But unlike countries such as Germany, the UK isn’t reliant on Russian gas. Instead, it gets the fuel from domestic production, Norwegian supplies arriving via undersea pipelines, and LNG shipments.

Britain’s private sector stepped up LNG procurement following Russia’s invasion of Ukraine. In June, UK utility Centrica Plc signed a deal to buy gas from Norway’s Equinor ASA, and last month it reached an agreement to take LNG from US company Delfin Midstream Inc.

It’s not clear what volumes the UK government is trying to help procure, but officials are seeking to buy LNG indexed to the US benchmark Henry Hub gas price, and delivered on an ex-ship basis, where the seller has to deliver the cargo to a fixed buyer and location, the people said.