Centrica's £4bn deal secures gas supplies

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The Independent Online

Centrica, the owner of British Gas, yesterday signed a £4bn deal to ship in enough gas from Malaysia to supply every home in Britain for a year.

Centrica, the owner of British Gas, yesterday signed a £4bn deal to ship in enough gas from Malaysia to supply every home in Britain for a year.

Petronas, Malaysia's state-owned oil and gas company, will deliver 45 billion cubic metres of the fuel over 15 years, from 2007 or 2008.

Britain's 40-year self-sufficiency in gas is rapidly drawing to a close, as supplies from the North Sea dwindle. Within six years, only half of the country's gas needs are likely to be satisfied by domestic supply. By 2020, that will become just one-tenth, with about a quarter of the country's gas delivered in liquid form from abroad.

Figures this week revealed that last month the UK imported more oil than it sent abroad, for the first time in 11 years.

Centrica's chief executive, Sir Roy Gardner, said: "There is a growing shortage of gas in Europe. The UK is becoming a net importer. But I don't believe there will be a shortage here after the actions we are taking."

Supertankers will ship three billion cubic metres of Malaysian liquified gas each year to Petronas's "Dragon" terminal at Milford Haven in South Wales, which is due to be completed in October 2006. There, the fuel will be converted back into a gas, before Centrica buys it and pipes it to its 12 million UK customers.

Centrica supplies gas to about six in every 10 homes, and estimates yesterday's deal will cover 6 per cent of all its needs.

Liquid gas is seen as a solution to Britain's increasing dependence on foreign fuel. It is cheaper to import than the gaseous form because costly pipe systems are not needed.

Petronas's factory in Milford Haven, which is a joint venture with Petroplus of the Netherlands and BG Group, is one of three such terminals under construction in the UK.

Centrica shares edged 0.25p higher to 241.75p. Last month, interim profits crept 1 per cent higher to £582m.

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