Centrica, ECP to buy UK’s Grain LNG terminal

National Grid said on Thursday the terms of the transaction comprise total proceeds of 1.66 billion pounds ($2.25 billion), including a pre-completion dividend.

The final consideration will be subject to certain completion adjustments, according to National Grid.

Completion of the transaction remains subject to customary government and regulatory approvals.

Subject to these clearances, National Grid expects that the transaction will complete later this year.

Last year, National Grid revealed it aims to sell its Isle of Grain LNG facility, which it says is Europe’s largest LNG terminal.

Centrica said in a separate statement that the firm and ECP will each own 50 percent in the facility under the deal, with an enterprise value of 1.5 billion pounds.

National Grid and Garden Bidco, which is ultimately owned 50 percent by each of Centrica
and ECP, have entered into the sale and purchase agreement.

After taking into account approximately 1.1 billion pounds of new non-recourse project finance debt, Centrica’s 50 percent share of the equity investment is approximately 200 million pounds, the company said.

Centrica said the transaction is aligned with its strategy of investing in regulated and contracted assets, “supporting the energy transition, delivering predictable long-term, inflation-linked cash flows, with 100 percent of capacity contracted until 2029, more than 70 percent until 2038, and more than 50 percent until 2045.”

The company noted that there are opportunities for efficiencies to create additional near-term value, and future development options including a combined heat and power plant, bunkering, hydrogen, and ammonia.

Grain LNG

Launched in 2005, the Grain LNG terminal currently has eight operational LNG storage tanks able to store 1,000,000 cbm.

The facility has two jetties and a total capacity of about 15 mtpa.

Also, National Grid is expanding the facility with a new 190,000-cbm storage LNG tank.

According to National Grid’s website, the total investment in the LNG facility reached more than $1.1 billion to date.

In February last year, National Grid revealed two Grain LNG capacity agreements with Algeria’s LNG producer Sonatrach and US LNG exporter Venture Global LNG.

Under the binding terminal use agreement with Venture Global, the firm will have the ability to access 3 mtpa of LNG storage and regasification capacity at the Grain LNG terminal for 16 years beginning in 2029.

The deal will enable the regasification and sale of LNG from all of Venture Global’s LNG terminals in Louisiana, including CP2 LNG.

Before this agreement, Grain LNG signed a ten-year deal with Sonatrach that will extend the latter’s storage and redelivery capacity at the LNG import terminal from January 2029.

This is the first agreement for 125GWh/d of import capacity, equivalent to 3 mtpa of LNG, from Grain LNG’s competitive auction process which was launched in September 2023 for about 9 mtpa of existing capacity.

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

With the increase in capacity to 14.8 mtpa, 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.