Centrica Locks In 10-Year Canadian Gas Supply Deal Tied to LNG Markets

A new long-term agreement will connect Canadian natural gas production to international LNG and European pricing markets, highlighting growing demand for globally linked gas supply arrangements.

(P&GJ) — Centrica Energy has signed a 10-year natural gas supply agreement with Canadian producer Peyto Exploration & Development that will link Alberta gas production to LNG and European gas market pricing beginning in 2029.

Under the agreement, Peyto will supply approximately 50,000 MMBtu per day of natural gas to Centrica Energy through 2039. Deliveries will be made at TC Energy's AECO hub in Alberta, one of Canada's primary natural gas trading points.

The contract uses pricing tied to the Dutch Title Transfer Facility (TTF), Europe's benchmark natural gas market, providing Peyto with exposure to international gas prices while supporting Centrica's LNG trading and supply portfolio.

The agreement represents another example of Canadian gas producers seeking access to global LNG-linked pricing as new export capacity is developed on Canada's West Coast. For Centrica, the deal adds long-term supply flexibility as the company continues expanding its global LNG business.

"This agreement strengthens our LNG-linked gas supply portfolio and supports our ability to manage market risk and optimize global cargo flows," Cassim Mangerah, managing director of Centrica Energy, said in a statement.

Peyto President and CEO Jean-Paul Lachance said the agreement provides the company with its first direct exposure to European gas markets and supports its strategy of diversifying sales beyond traditional North American benchmarks.

The companies did not disclose the financial terms of the agreement.