, VT (PressExposure) June 09, 2009 -- Centrica plc, the parent company of British Gas, today announced it has reached an agreement with Canadian Superior Energy Inc. (TSX:SNG) under which Centrica could acquire a 45 per cent interest in gas development Block 5(c), located off the south east coast of Trinidad, for US$142.5 million (Â£87 million) in cash. The agreement is subject to pre-emption rights from the existing field partners and subject to approvals from the Trinidad Government and Canadian courts. The block is operated by BG Group, which holds a 30 per cent stake.
To date, successful exploratory drilling of Block 5(c) has identified significant contingent gas reserves, with recoverable reserves attributable to a 45 per cent equity stake estimated at 650 billion cubic feet (bcf), equivalent to around half Centrica's current UK gas reserves. Additional undrilled exploration opportunities could substantially increase the potential of the block.
This acquisition would provide Centrica with a material gas position in Trinidad which is close to existing gas pipeline infrastructure and Liquefied Natural Gas (LNG) export facilities. The gas could supply Centrica customers in the UK, with additional options provided by Centrica's North American customer base and the opportunity to sell into other Atlantic Basin markets.
Subject to development plan approval, the first gas from Block 5(c) could be delivered in 2014. Centrica's initial estimates of development capital expenditure attributable to a 45 per cent equity stake are around Â£400 million.
Sam Laidlaw, Chief Executive of Centrica, 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 plc would acquire the 45 per cent equity in Block 5(c) from Canadian Superior through its wholly-owned subsidiary, Centrica Resources Limited.
Centrica has an existing position in Trinidad and Tobago through an equity interest in Block 2(ab).
Centrica has taken delivery of six LNG cargoes into the UK within the last six months and has contracted another 10 cargoes for 2009 and 2010, utilising Centrica's import capacity at the Isle of Grain re-gasification facility.
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