Standard content for Members only
To continue reading this article, please login to your Utility Week account, Start 14 day trial or Become a member.
If your organisation already has a corporate membership and you haven’t activated it simply follow the register link below. Check here.
Iberdrola is set to tap into US shale gas in a $4.1 billion (£2.5 billion) deal with Cheniere struck on Friday.
The Spanish-owned utility signed a 20-year contract to buy around 1 billion cubic meters of LNG a year from the American firm. That will support Cheniere in building a liquefaction plant at Corpus Christi, Texas, to convert natural gas into LNG for export.
The deliveries, starting in 2018 or 2019, could go anywhere in the world but are primarily destined for Iberdrola’s UK Scottish Power and Spanish customers. Supplies will enter the UK through a terminal on the Isle of Grain.
Prices will be linked to the US-based Henry Hub. In recent years, a boom in US shale gas supplies has seen prices fall within the country. A lack of export facilities has prevented that cheap gas from reaching the global market.
Iberdrola follows Centrica in seeking to take advantage of the boom. Centrica struck a 20-year deal with Cheniere in March 2013 to buy LNG from its Sabine Pass plant in Louisiana, which is due to start flowing in September 2018.
Earlier this week, the European Commission stressed the need for the EU to diversify supplies and reduce dependence on Russian gas, in light of the Ukraine crisis.
Please login or Register to leave a comment.