Distrigas of Massachusetts LLC said it has struck long-term agreements to sell about 9.5 Bcf of liquefied natural gas (LNG) to New England local distribution companies for peak demand needs during the upcoming winter and beyond, the company said.

One utility is to receive 6 Bcf of LNG this year and at least 3 Bcf of LNG per year from 2016 to 2024 from Distrigas affiliate GDF SUEZ Gas NA LLC. The LNG will be stored for use during the winter, Distrigas said. Volumes sold in 2015 and supplies offered on a long-term basis are based on U.S. natural gas prices, Distrigas said. The New England region is capable of storing about 20 Bcf of LNG in aboveground storage facilities.

“These LNG sales agreements underscore the important role LNG plays in advancing natural gas supply security and price stability in New England — today and well into the future,” said GDF SUEZ Gas CEO Frank Katulak. “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.”

For both short- and long-term contracts, 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.

“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,” Katulak said. “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.”

National Grid has a supply contract for LNG from Distrigas and has had one for years, spokeswoman Jackie Barry told NGI.

“This is the same contract that we’ve had with them literally for decades, and it’s simply to refill our LNG tanks in the springtime,” Barry said. “This contract calls for us to take supply beginning in April, and we can go up through November. It’s the LNG that we use during the wintertime. There are two things that are different: One, it’s for a longer term, and if you annualize it, it’s less than we normally take from Distrigas on an annual basis.

“This is for existing gas customers, and it’s only for gas. It’s got nothing to do with our electric distribution companies…and it won’t help meet the need for incremental gas customers.”

That’s a job for pipelines, Barry said.

Earlier this year, National Grid signed on to the Access Northeast pipeline project, joining Eversource Energy and Spectra Energy in the endeavor to move gas to New England (see Daily GPI, Feb. 19).

“We’ve always felt that it makes a lot more sense for customers, from an LDC standpoint and from an electric standpoint, to build pipelines into the region…so that we can rely on the nearby affordable, abundant, secure and cost-effective natural gas supplies that can be available when needed,” Barry said. “Imported LNG certainly does have a role in addressing the region’s energy needs, but it’s a defined role but in no means is a silver bullet.”

Although the Marcellus Shale is practically in New England’s backyard, there is a shortage of pipeline capacity available to move domestic natural gas into the Northeast (see Daily GPI, April 29; Jan. 23). Distrigas said LNG can play a larger role in meeting New England’s demand for gas.

“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,” Distrigas said. “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.”

Last summer, GDF Suez said it had signed a purchase agreement with a subsidiary of Montreal-based Gaz Metro to provide up to 1 Bcf of LNG to help meet peak demand in New England for the 2014-2015 winter season (see Daily GPI, Aug. 13, 2014).