The plans, by Lattice Group, for the development of the facility at the existing liquid natural gas (LNG) plant on the Isle of Grain, include the construction of a new jetty, vaporisers and a pipeline which will run from the deep water berth on the Medway to the nearby existing LNG storage and re-gasification plant.

Government forecasts prepared for the current review of energy policy show that, as UK offshore production declines, Britain’s gas market will become increasingly dependent on imports. LNG shipped from exporting countries, such as Nigeria or those in the Middle East, will be one way of meeting the needs of the British market.

The application for planning permission follows a feasibility study and engineering analysis and includes a full environmental impact study report. Plans are, however, still at an early stage and Lattice is working with the various stakeholders in the area including the Medway Borough Council, Medway Ports Authority and Health and Safety Executive, as they are developed. Any decision to proceed with the proposals is subject to both planning and regulatory approvals.

If it does go ahead, the terminal could be operational by the end of 2004.

Chris Train, Director, Lattice LNG, said the proposed terminal would help ensure Britain’s energy needs are met in decades to come. "These proposals are a tremendous opportunity to develop a modern facility on an industrial site which will be capable of maintaining substantial supplies of gas to homes and industry in Britain, and South East England in particular. The Grain site is ideal - it is has deep water access, and is close to the centre of demand and existing storage facilities plus a National Transmission System (NTS) connection," he said.

Notes to Editors:

1. LNG is natural gas liquefied by refrigeration to a temperature of -1600C, a process which reduces its volume to 1/600th of that at normal temperature and enables bulk transportation by tanker.

2. Britain’s gas demand is projected to increase by 16 per cent in the next ten years. As production from North Sea gas fields declines, dependence on gas imports is forecast to approach 50 per cent within the same period. To import this gas, analysis by Transco as part of its annual public consultation on gas supply and demand indicates that three more gas import pipelines, LNG terminals, or a combination of these, will be required.

3 Lattice Group plc is one of three successor companies to the former British Gas plc. The Group specialises in the safe and reliable provision, management and servicing of infrastructure networks. Lattice Group’s core business is Transco, the owner and operator of Britain’s gas transportation network. Other operations include telecoms, including fibre optic and mobile telecommunications tower networks, and Lattice Enterprises, a diversified group of businesses providing gas industry related services.

4 On July 15 and 23 respectively, Lattice Group plc and National Grid Group plc shareholders approved a proposal to merge the two companies and create National Grid Transco. The merger remains subject to sanction of a scheme of arrangement (under section 425 of the Companies Act 1985) by the High Court, and the satisfaction of a number of conditions including regulatory consents and approvals. The merger is expected to complete during Autumn 2002.