• 50 per cent increase in terminal capacity to 14.8 million tonnes of LNG
• Capable of importing around one fifth of forecast UK gas demand by 2010
• Takes total investment at Grain LNG terminal to over £750 million, all underpinned by long term contracts

National Grid today announces its intention to proceed with a £310 million project to increase capacity by fifty per cent at its Liquefied Natural Gas (LNG) importation terminal at the Isle of Grain in Kent. This expansion will increase total capacity to 14.8 million tonnes of LNG and enable the terminal to import around 20% of forecast UK gas demand by 2010/11. This third phase of development takes the total investment at National Grid’s Grain LNG terminal to over three quarters of a billion pounds in response to the UK’s increasing dependence on gas supply imports.

The expansion will provide an additional five million tonnes of LNG importation capacity per year and will increase the total capacity at the terminal from 9.8 million tonnes in 2008 to 14.8 million and will position Grain LNG amongst the world’s most modern LNG terminals.

The £310m investment is underpinned by long term contracts with E.On, Iberdrola and Centrica who have taken all the additional capacity. These contracts were signed recently following the completion of an auction process and exemption from third party access arrangements granted by Ofgem. This demonstrates further substantial growth investment in the UK, which National Grid has reaffirmed as a core market for its electricity and gas businesses, alongside its operations in the US.

This investment includes a £250m lump-sum turnkey contract which has been awarded to CB&I to construct a second unloading jetty, an additional 190,000m3 LNG storage tank and associated process equipment to support this expansion. 

National Grid’s Executive Director for Non Regulated Business, Edward Astle, said, “National Grid has responded to the decline in North Sea gas supplies by developing the country’s first modern LNG terminal to meet importation requirements. We are delighted to announce this further expansion at the terminal which will provide the UK with increased diversity of supply.”

The Grain LNG terminal, which commenced operations in July 2005, is currently able to import 3.3 million tonnes of LNG each year on a 20-year contract with its customer BP and Sonatrach. A second phase of development is already underway, with three new storage tanks currently under construction, which is due to increase capacity three-fold to 9.8 million tonnes in 2008. Long term contracts for this capacity have been agreed with Gaz de France, Centrica and Sonatrach.  

ENDS

For further information please contact:
Louise Farrell  +44 (0)1926 655373
Stewart Larque +44 (0)1926 655274
Chris Mostyn  +44 (0)1926 655275 

Photographs of National Grid Grain LNG are available for free download at www.newscast.co.uk  

Notes to Editors:

National Grid
National Grid is one of the world's largest utilities, focused on delivering energy safely, reliably, efficiently and responsibly. Our principal interests are in the transmission and distribution of electricity and gas in the UK and US. 

We own the high-voltage electricity system in England and Wales and operate the system across Great Britain. We also own and operate the high pressure gas transmission system in Great Britain, and the country’s largest gas distribution network serving 11 million customers.

We also have interests in related markets, including metering services, liquefied natural gas facilities and property in the UK, as well as electricity interconnectors in the UK and US.

www.nationalgrid.com

National Grid Grain LNG
National Grid Grain LNG, a wholly owned subsidiary of National Grid, owns and operates the UK’s first modern LNG importation terminal, playing an important role in securing UK gas supply. Commissioned in July 2005, the terminal is at present able to provide 3.3 million tonnes of LNG capacity per annum.

LNG is essentially the gas used in homes and business, which has been chilled to -161 degrees centigrade into a liquid state. Liquefied Natural Gas takes up 600 times less space than in its gaseous form which makes it an ideal way of storing and transporting large volumes of natural gas from diverse sources such as Algeria, Trinidad and the Middle East. Stored at these low temperatures, LNG will not burn as a liquid and has a good safety record.

www.nationalgrid.com/grainlng

An RSS feed is now available for National Grid press releases
http://www.nationalgrid.com/uk/media+centre/pressreleases/rss