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British Centrica adquire Suncor Energy assests in Trinidad & Tobago

Centrica took delivery of 15 LNG cargoes from Trinidad & Tobago into the UK during 2009 and has contracted another seven cargoes for 2010, utilising Centrica's import capacity at the Isle of Grain re-gasification facility.

TORONTO
Petroleumworldtt.com 02 26 2010

Suncor Energy has reached a deal to sell offshore natural gas assets in Trinidad and Tobago to British energy giant Centrica for $396 million cash, the companies said Thursday.

The assets were held by Petro-Canada, which merged with Suncor last June.

Suncor said the sale was part of its "strategic business alignment," which entails the sale of non-core businesses including certain natural gas assets in Western Canada and the U.S. Rockies, and certain North Sea assets.

Centrica, which runs a stable of energy companies, including gas and electricity supplier British Gas and North American distributor Direct Energy, already had an interest in an offshore Trinidad exploration block.

"This acquisition provides Centrica with its first producing liquefied natural gas [LNG] position and significant development opportunities for future, long-term LNG supplies," Centrica said.

The purchase includes an area producing 60 to 70 million cubic feet of natural gas equivalent a day, and equity in three other blocks.

The sale is expected to close in March, subject to approvals from the Trinidad and Tobago government and regulatory agencies.

The deal Thursday boosts the total of Suncor's non-core asset sales to about $1.3 billion.

Portfolio of Suncor gas assets comprises a 17.3 per cent stake in the North Coast Marine Area (NCMA-1) gas production area and equity interests in three blocks; Blocks 22, 1(a) and 1(b), for future development.

The NCMA-1 block currently supplies gas into the Atlantic LNG (ALNG) facility, and holds remaining working interests of 266 billion cubic feet (bcf) of proven and probable (2P) reserves attributable to Centrica's 17.3 per cent stake. This will provide Centrica with 60-70 million standard cubic feet per day (mmscfd) of gas production in 2010. Gas produced from NCMA-1 has been contracted to a third party on a long-term basis until 2023, achieving international gas prices with any additional benefits from diversion being shared between the partners.

Gas development opportunities in Block 22 and Blocks 1(a) and 1(b) comprise a 90 per cent and 80 per cent operated interest respectively and contain significant contingent gas resources, with recoverable resources attributable to Centrica's equity stakes estimated at 1.34 trillion cubic feet (tcf). Centrica will consider options for the development of these gas discoveries together with appropriate equity partnerships. Blocks 1(a) and 1(b) of just under 0.2 tcf are subject to pre-emption from existing field partners.

Sam Laidlaw, Centrica Chief Executive, said: "This is a significant move into one of the world's most established LNG areas providing us with access to both gas producing and development blocks. Combined with last year's acquisition of Venture Production, this agreement builds further on our upstream capability and marks a step change in our global gas position."

Suncor stock has slipped to around $30 from $37.50 last June 4, the day shareholders approved the Petro-Canada merger. It closed down 16 cents at $30.34 in TSX trading Thursday.

The TSX energy sub-index is up about two per cent over the same period.

Source: CBC NEWS / Centrica

Story from Petroleumworld Trinidad

Petroleumworldtt.com 02 25 2010

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