Contracts expected to provide greater fuel flexibility to better manage New England’s peak demand
BOSTON – May 11, 2015 – Distrigas of Massachusetts LLC, through its affiliate GDF SUEZ Gas NA, LLC,
has entered into a series of contracts to sell approximately 9.5 billion cubic feet (Bcf) of liquefied natural gas
(LNG), roughly the equivalent of three shiploads, to New England gas utilities to help meet those utilities’
peak demand for natural gas in the 2015/2016 winter and beyond. The LNG will be delivered over the
summer and stored by those utilities until required this winter. In addition, the company has offered, and
continues to offer, contracts for the long-term supply of LNG to all of its utility customers. Volumes sold in
2015 and supplies offered on a long-term basis are based on U.S. natural gas prices.
In a significant long-term supply arrangement, Distrigas has concluded an agreement to supply a large New
England natural gas utility with 6 Bcf of LNG this year and at least 3 Bcf of LNG per year from 2016 – 2024.
“These LNG sales agreements underscore the important role LNG plays in advancing natural gas supply security
and price stability for New England – today and well into the future,” said Frank Katulak, President and Chief
Executive Officer of GDF SUEZ Gas NA. “Because the infrastructure already exists and the supply can be
efficiently deployed locally to customers who need it, LNG is the most cost-competitive and reliable option for serving
the region’s peaking needs.”
LNG is anticipated to play a crucial role in protecting the region from natural gas price spikes on the spot market
provided that utilities and other customers such as power generators contract in advance for LNG. This past winter,
the region was protected from price spikes in natural gas thanks in large part to 39 Bcf of LNG supply that was
consumed in the region and supplied by various providers, including 21.3 Bcf supplied from the Distrigas terminal.
This LNG didn’t require any additional infrastructure investment or expansion, and energy prices fell by more than
20 percent for many customers.
New England lies at the end of the U.S. and Canadian pipeline systems, and there is no natural gas
production or underground storage caverns in New England. Natural gas utilities are able to truck and
store natural gas as a liquid (ie, LNG) in facilities above ground, then vaporize and inject the gasified LNG
into their delivery systems when and where it is needed to meet consumers’ needs. The New England
region is capable of storing about 20 Bcf of LNG in above ground storage facilities; hence LNG is an
important element in regional diversification of natural gas supply, utilizing existing LNG import,
transportation and storage infrastructure.
Commenting on the recently signed agreement to supply 6 Bcf of LNG this year and at least 3 Bcf of LNG
per year from 2016-2024 to a New England utility customer, Katulak also noted, “The long-term nature of
the deal shows significant foresight by this customer as it will provide greater certainty around its natural
gas supply, which continues to be more and more important to the region. In addition, this agreement
underscores that we can optimize the region’s current pipeline capacity for the foreseeable future,
potentially avoiding much more expensive and expansive investments.”
For both the short- and long-term contracts, the LNG will be trucked from the Distrigas Everett Marine
Terminal just north of Boston to the utilities’ LNG facilities across New England. Deliveries began in April.
Distrigas of Massachusetts LLC and GDF SUEZ Gas NA LLC are part of GDF SUEZ Energy North America, Inc.,
which manages a range of energy businesses in the United States, Mexico, and Canada. These businesses include
electricity generation and cogeneration, natural gas and liquefied natural gas (LNG) distribution and sales, and retail
energy sales and related services to commercial and industrial customers. Distrigas of Massachusetts owns and
operates the LNG receiving terminal in Everett, Mass. The Everett terminal began operations in 1971 and currently
serves most of the natural gas utilities in New England and key power producers through both pipeline deliveries and
an average of 10,000 tanker truck deliveries of LNG each year.
Julie Vitek, 713 636 1962