Centrica to buy 45% stake in Trinidad block

Centrica PLC will increase its position in Trinidadian LNG development by acquiring a 45% interest in gas development Block 5(c), off the southeast coast of Trinidad and Tobago.

Jun 2nd, 2009

Uchenna Izundu
OGJ International Editor

LONDON, June 2 -- Centrica PLC will increase its position in Trinidadian LNG development by acquiring a 45% interest in gas development Block 5(c), off the southeast coast of Trinidad and Tobago.

The company agreed to pay $142.5 million cash to Canadian Superior Energy Inc. and will use the estimated 650 bcf of recoverable gas to supply customers in the UK, North America, or other Atlantic Basin markets from 2014. The block is close to existing gas pipeline infrastructure and LNG export facilities. The company's initial estimates of development capital expenditure attributable to its stake are £400 million.

Centrica will join BG Group, which operates the block with a 30% stake. "The agreement is subject to preemption rights from the existing field partners and subject to approvals from the Trinidad Government and Canadian courts," said Centrica.

So far BG has discovered significant contingent gas reserves, and the partners hope undrilled exploration opportunities could substantially increase the potential of the block. Centrica said its share of reserves is equivalent to half its current UK gas reserves.

Centrica Chief Executive Sam Laidlaw 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."

Centrica has an existing position in Trinidad and Tobago through an equity interest in Block 2(ab).

Contact Uchenna Izundu at uchennai@pennwell.com.

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