UK’s Grain LNG, Algeria’s Sonatrach ink 10-year capacity deal

National Grid’s Grain LNG signed a ten-year deal with Algeria’s LNG producer Sonatrach that will extend the latter’s storage and redelivery capacity at the LNG import terminal from January 2029.

According to National Grid, this is the first agreement for 125GWh/d of import capacity, equivalent to 3 million tonnes per annum of LNG, from Grain LNG’s competitive auction process which was launched in September 2023 for about 9 mtpa of existing capacity.

“The successful outcome of the auction further secures the future of Europe’s largest LNG import terminal into the next decade,” it said.

National Grid owns the terminal, infrastructure and storage tanks, and works with a range of customers who use the terminal launched in 2005.

National Grid’s first customers, BP/Sonatrach, were awarded a 20-year contract for 3.3 million tonnes of LNG throughput capacity per year.

With the increase in capacity to 14.8 million tonnes, additional contracts were awarded, again on a long-term basis, to Centrica, GDF Suez (now TotalEnergies) and Sonatrach, from December 2008 and to E.ON, Iberdrola and Centrica from December 2010.

Iberdrola sold its capacity to Pavilion Energy effective from January 2020.

Back in 2020, QatarEnergy also booked capacity from 2025 as part of the expansion of the Grain terminal.

The UK has recently seen a significant rise in LNG imports as Europe has diversified its LNG sources.

Europe’s largest LNG terminal welcomed 102 ships during the financial year which ended in March last year, breaking its previous record of 71 ships set in the financial year 2019 – 2020.

Also, the LNG terminal has sent 102,589 GWh of gas into the grid over the twelve-month period ending May 31, the equivalent of almost 14 percent of total UK gas demand.

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