Devon Energy has secured a long-term natural gas sale and purchase agreement (SPA) with Centrica Energy, the trading arm of Centrica, marking a significant move in the energy sector.

Starting in 2028, Devon Energy will supply Centrica with 50 billion British thermal units (Bbtu) per day over a ten-year term, equivalent to approximately five liquefied natural gas (LNG) cargoes annually.

The agreement is strategically designed to mitigate market price risk in Centrica's LNG portfolio by linking feed gas pricing to the European gas hub price, or Title Transfer Facility (TTF). This arrangement also grants Devon Energy exposure to international pricing.

Centrica Group CEO Chris O’Shea said: “Gas remains an essential transition fuel and, through long-term agreements like this, Centrica ensures competitively indexed gas supply for our LNG business and builds on the deep and important energy trade links between the US and the UK.”

Centrica Energy's US subsidiary, which recently established a presence in New York, will manage the physical volumes of the deal within the US, ensuring efficient handling and optimisation of the natural gas supply.

In a parallel move, Centrica has joined forces with Energy Capital Partners to purchase a 50% stake in the Isle of Grain LNG terminal from the UK's National Grid for an equity investment of approximately £200m ($270.77m).

The total enterprise value of this transaction is £1.5bn. Grain LNG plays a crucial role in the UK's energy security, providing vital LNG import/export, regasification and storage facilities.

This acquisition is in line with Centrica's strategy to invest in assets that not only support the energy transition but also offer predictable, long-term cash flows.