Centrica, the parent company of British Gas, today announced it has reached an agreement with Canadian Superior Energy under which Centrica could acquire a 45% interest in gas development Block 5(c), located off the south east coast of Trinidad, for US$142.5 million (£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% stake.

To date, successful exploratory drilling of Block 5(c) has identified significant contingent gas reserves, with recoverable reserves attributable to a 45% 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.

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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 optionality 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 £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."

(CD/JM)