Centrica, the owner of British Gas, has entered into a partnership with Energy Capital Partners LLP to purchase the UK’s largest liquefied natural gas (LNG) import terminal, located at the Isle of Grain. The acquisition, valued at approximately $2 billion (£1.5 billion), was announced on Thursday. This strategic move is part of Centrica’s ongoing efforts to invest in essential energy infrastructure assets that support the transition to sustainable energy.
The terminal, known as Grain LNG, is being acquired from National Grid. Centrica highlighted that this investment aligns with its strategy to enhance its portfolio with regulated or contracted cash flows, which provide stable returns and future growth opportunities. Grain LNG is notable for its long-term contractual agreements; it is fully contracted until 2029, over 70% contracted until 2038, and more than 50% contracted to 2045. This structure offers Centrica “highly visible long-term earnings and cash flow,” according to the company.
Significance of Grain LNG
Grain LNG, positioned at the eastern edge of London off the Thames estuary in Kent, stands as Europe’s largest LNG regasification terminal. The terminal is currently undergoing an expansion to enhance its regasification capacity and increase storage capabilities. Upon completion, it is expected to meet up to a third of the UK’s gas demand, further solidifying its importance in the national energy landscape.
Following the acquisition, the existing management team at Grain LNG will maintain operations as an independent entity. This continuity is aimed at ensuring that the terminal can effectively meet the growing energy demands of the UK market.
Centrica’s acquisitions are not limited to Grain LNG. The company also owns and operates the UK’s largest gas storage site, Rough. In 2022, it resumed storage operations at Rough to strengthen the UK’s energy security and help stabilize consumer energy costs. Since then, Centrica has expanded the storage capacity at Rough, as well as at the Easington onshore gas processing terminal in East Yorkshire.
Today, Rough accounts for half of the UK’s gas storage capacity, with the ability to store 54 billion cubic feet (bcf) of gas. This volume is sufficient to heat approximately 2.4 million UK homes during the winter months, underscoring Centrica’s critical role in the energy supply chain.
With these strategic investments, Centrica is positioning itself to play a key role in the evolving energy market, focusing on sustainability while ensuring reliable energy access for consumers.
