Qatar Petroleum, the leading global LNG exporter, has arranged storage and redelivery capacity for 25 years at Europe’s largest import terminal, the UK Isle of Grain facility, located southeast of London.
The deal was signed between the UK company and gas network operator, National Grid Plc, and Qatar Petroleum’s Qatar Terminal Limited (QTL) unit after the conclusion of an open season process launched by the UK operator away back in November 2019.
Qatar said its affiliate will subscribe to the equivalent of up to 7.2 million tonnes per annum of LNG as part of the terminal’s future throughput capacity.
The Qataris said that by entering into the agreement the Gulf nation was “reaffirming” its commitment to the UK gas market.
Qatargas is a majority shareholder at the UK’s second-largest import terminal, the South Hook facility at the Welsh port of Milford Haven.
The Isle of Grain terminal, located on the Isle of Grain on the Thames-Medway estuary about 45 miles southeast of London in the country of in Kent, is currently able to store and deliver enough gas to meet at least 25 percent of UK gas demand.
The UK-Qatar agreement was signed by Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs as well as being President and Chief Executive Qatar Petroleum, and Jon Butterworth, the Managing Director of National Grid Ventures, during a virtual ceremony
The ceremony was attended by the Kwasi Kwarteng, the Minister of State for Business, Energy and Clean Growth in the UK, and senior executives from both sides.
“We believe this agreement will facilitate a greater role for LNG as a reliable, economic, and environmentally friendly source of energy in the UK,” said Al-Kaabi.
The Qatari CEO also highlighted the strong cooperation between Qatar and the UK in the field of energy, as well as the importance of this agreement.
“Our agreement with Grain LNG will strengthen our position in support of advancing greater access to secure, flexible, and reliable gas supplies for all customers in the UK,” explained Al-Kaabi.
“I would like to commend National Grid for a very transparent and successful Open Season process, and look forward to further cooperation to strengthen our relationship,” he stated.
National Grid’s Butterworth said it was an important day for UK gas security, for Grain LNG and for the community around the Isle of Grain.
“LNG imports play a critical role in making sure the UK has the gas it needs, when it needs it,” added Butterworth.
“This agreement ensures that Grain LNG will continue to offer the UK a flexible and reliable supply of gas to complement the growth of intermittent renewable generation,” he stated.
“It also secures the future of a facility that is a significant contributor to the economy on the Isle of Grain. I look forward to working with Qatar Petroleum in the coming years and to continuing to operate a world-class asset that market participants and UK consumers can rely on,” he declared.
The Isle of Grain terminal began operations in 2005 and is regulated by the Office of Gas and Electricity Markets, known as Ofgem.
The regasification facility has 1 million cubic metres of LNG storage capacity spread across eight storage tanks and an annual throughput capacity of 20 billion cubic metres of natural gas.
The terminal will be expanding its facilities with an additional tank and associated vaporizer capacity, bringing its future annual throughput to 25 Bcm of natural gas, or 18.5 million tonnes per annum of LNG.