Delfin signs SPA for second FLNG unit offshore Louisiana

Delfin LNG has entered into a new sale and purchase agreement (SPA) with UK-based Centrica LNG for volumes from its proposed second floating LNG (FLNG) unit. This was disclosed in a June 18 filing with the US Department of Energy (DoE) that came around two weeks after parent company Delfin Midstream announced a final investment decision (FID) on the first FLNG unit at Delfin LNG.

According to the details disclosed in the filing, Delfin has agreed to supply Centrica with 13mn mmBtu (250,000 tonnes) per year over the first 15 years of the 20-year agreement. Over the subsequent five years, this volume will drop to 2.6mn mmBtu (50,000 tonnes) per year. The start date was not specified, but the contract is due to go into effect when the second Delfin FLNG vessel begins commercial deliveries.

Commercial terms have not been publicly disclosed – which is typical for LNG SPAs – though a copy of the full SPA has been shared with the DoE.

Centrica is already an offtaker from the first Delfin vessel, which is now under construction. Indeed, Centrica’s offtake commitment for Delfin FLNG 1 was raised from 900,000 tonnes per year (tpy) to 1.05mn tpy in May.

The SPA for Delfin FLNG 2 was also finalised in May – before Delfin took its FID on the first vessel. Centrica confirmed the deal separately in an announcement in mid-June. It comes as the UK company continues to diversify its LNG portfolio.

Delfin said when it announced the FID on FLNG 1 that it was targeting FIDs on the second and third vessels at its project, located offshore Louisiana, later this year. The company ran into numerous delays in reaching FID on the first vessel, but now, with the necessary regulatory approvals in hand, the path towards FIDs on the remaining vessels stands to be more straightforward provided Delfin can secure enough offtakers and finalise financing.

Delfin FLNG 1 is due to enter service in 2030. Each of the FLNG vessels will have a capacity of 4.4mn tpy, for a total capacity of 13.2mn tpy. The new SPA with Centrica therefore accounts for only a small portion of the volumes from FLNG 2. Nonetheless, it represents another step forward for Delfin and illustrates how the company’s efforts are gaining momentum.