More Canadian natural gas is set to make its way to European shores as Tourmaline Oil Corp. announces a 10-year supply deal with Centrica Energy, the trading arm of British Gas owner Centrica plc.

The contract will see Tourmaline deliver 50,000 million British thermal units per day (mmbtu/d) — the equivalent of five liquefied natural gas (LNG) cargoes a year — to Centrica beginning in April 2028, the company said Wednesday. The deal is priced off Europe’s main gas benchmark, giving Tourmaline exposure to global LNG prices.

It is the second direct supply deal the Canadian gas producer has struck with a European buyer in recent months. Tourmaline is also set to supply German utility Uniper through deliveries of natural gas to the U.S. Gulf Coast, where it will be liquefied and shipped as LNG to Europe.

The contract was one of three new LNG supply agreements Tourmaline announced Wednesday, alongside a decidedly gloomy set of third-quarter results.

The company reported a profit of $190 million in the third quarter, down 46 per cent from $355 million a year ago, reflecting depressed natural gas prices.

Tourmaline said pipeline maintenance that restricted gas exports from Western Canada during the quarter flooded the local market, pushing regional gas prices to their lowest levels in more than 30 years.

The company shut in an average of 5,000 barrels of oil equivalent per day (boe/d) over the quarter in response to extremely low gas prices, but Tourmaline said average production for the third quarter still came in at the high end of its guidance at 634,746 boe/d.

“While Tourmaline curtailed gas supply during the weakest local gas price days, the sustained low local gas prices were the primary reason for lower than expected third quarter (cash flow,” the company said. “Curtailments on export pipelines reduced company volumes accessing downstream markets (including premium markets such as the Gulf and Western U.S.) by approximately 155 million cubic feet per day.

“Instead, these volumes were sold into AECO and Station 2 spot prices, meaningfully impacting September natural gas revenue.”

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The company reported $720 million in cash flow during the quarter, down from $742 million a year ago.

Tourmaline also announced a new storage agreement with AltaGas Ltd. for six billion cubic feet (Bcf) of capacity at its Dimsdale facility starting next year. The company said the additional storage will give it an advantage in volatile markets, allowing it to hold back gas when prices are low to sell it later when they improve.

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