Centrica, a leading UK based energy services and solutions provider, has solidified a significant long-term partnership with Petrobras, Brazil's premier integrated oil and gas company, through a substantial Sale and Purchase Agreement (SPA). The agreement, announced on February 20, will see Petrobras procure 0.8 million tons per annum (MTPA) of Liquefied Natural Gas (LNG) from Centrica for a duration of 15 years, commencing in 2027.

The LNG supply, representing approximately 30% of Centrica’s US portfolio, will be sourced from the company’s existing supply agreements with Sabine Pass and Delfin LNG terminals.

Chris O’Shea, Centrica Group Chief Executive, emphasized the significance of the agreement, stating, “Centrica is investing to deliver the energy security, efficiency, and decarbonisation solutions our customers need today and in the future, and LNG is, and will continue to be, a crucial foundation of the energy transition. This agreement demonstrates our approach to building long-term partnerships while derisking our portfolio exposure in the medium-term, in turn positioning us to continue growing our portfolio as new LNG supply comes into the market over the coming years.”

The long-term nature of the contract provides both parties with stability and predictability in a volatile energy market. For Petrobras, the agreement offers a reliable source of LNG, reducing its reliance on the fluctuating spot market and enhancing its competitiveness.

Maurício Tolmasquim, Petrobras' Director of Energy Transition and Sustainability, highlighted the strategic alignment of the agreement with Petrobras’ objectives. “The agreement with Centrica is aligned with Petrobras' priorities to reduce its exposure to the spot market volatility, increase its competitiveness and be the best option for its customers. We also consider the contribution of this important product to promoting the energy transition.”

The agreement is a testament to the increasing importance of LNG as a transitional fuel in the global energy landscape. As nations strive to reduce their carbon emissions while ensuring energy security, LNG offers a cleaner alternative to traditional fossil fuels. The long-term nature of the Petrobras-Centrica deal signals a sustained demand for LNG as a critical component of the energy mix.

Centrica's strategic positioning, leveraging its US LNG portfolio, allows it to effectively meet the growing demand from key markets like Brazil. The company’s ability to secure long-term agreements while managing its portfolio exposure demonstrates its agility and foresight in navigating the complexities of the global energy market.

This partnership is expected to strengthen the bilateral energy relationship between the UK and Brazil, fostering greater cooperation in the energy sector. As Brazil continues to develop its infrastructure and diversify its energy sources, agreements like this will play a vital role in ensuring a stable and secure energy future.