Centrica seeks to meet demands for guarantees from volatile energy prices – FT

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September 5 (Reuters) – Britain’s biggest energy supplier Centrica Plc (CNA.L) is in talks with banks to secure billions of pounds of additional credit to meet rising demands for guarantees as the electricity market energy remains volatile, according to the Financial Times reported Monday, citing people familiar with the matter.

Centrica’s request for funding could put pressure on new UK Prime Minister Liz Truss to consider additional short-term financial aid for the energy sector, the report adds.

Centrica declined to comment.

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Truss is considering a freeze on household energy bills to try to avert a winter slump in the cost of living for millions of households, Reuters reported on Monday.

Truss will be officially named prime minister on Tuesday.

Centrica, owner of British Gas, last month signed a £7 billion ($8.06 billion) deal with US-based Delfin Midstream Inc to buy liquefied natural gas (LNG) from 2026. read the after

European countries are seeking to diversify their energy supplies following Russia’s invasion of Ukraine and the decline in gas flows from Russia to Europe.

The report comes at a time when gas prices in Europe have risen, stocks have slid and the euro is down after Russia cut off gas flows through a major pipeline, sending another shock wave through the economies in the region that are still struggling to recover from the pandemic.

European Union governments are pressing for multi-billion euro packages to prevent utilities from collapsing under a cash crunch and to protect households from soaring energy bills.

Finland and Sweden have both announced plans to offer billions of dollars in liquidity guarantees to power companies in their countries after Russia’s Gazprom (GAZP.MM) shut down the Nord Stream 1 gas pipeline, worsening the energy crisis in Europe.

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Reporting by Mrinmay Dey in Bangalore; Editing by Lisa Shumaker and Richard Chang

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