The largest European LNG import terminal, the UK Isle of Grain facility located southeast of London, has called on the market to participate in an expression of interest exercise for capacity.
Grain LNG has issued a statement inviting market participants to express an interest in low-cost capacity at the facility from 2029.
Applicants will have until August 15, 2022, to submit a non-binding declaration of their interest in capacity at Grain LNG.
“This is an opportunity for the market to indicate the quantities and duration of the contracts they would like, enabling Grain LNG to determine the best way to proceed and the capacity products to offer,” said the company.
Grain LNG, a subsidiary of the UK’s London Stock Exchange-listed National Grid plc, explained that it had a series of existing capacity contracts coming to an end over the course of 2029.
As a result, Grain LNG expects to be able to offer at least 360,000 cubic metres of storage and 300 gigawatt hours per day of regasification capacity for start-up in 2029.
“As the capacity already exists, this will enable Grain LNG to uniquely offer short-term contracts of five years or more and should result in significantly lower cost capacity versus new build terminals,” the company explained.
Nicola Duffin, Commercial Director at Grain LNG, said that LNG represented an ever more vital component in the UK and global energy mix and supported security of supply.
“This looks set to continue in the context of the wider market. LNG is also an important balancing tool for intermittent renewables,” added Duffin.
“The EOI provides a great opportunity to gauge market needs and help us to develop the packages and product offerings that meet those requirements,” she stated.
Grain LNG explained that once the application window closes, responses will be assessed, the product offering finalised and the need for an auction will be determined.
“Any auction plans must gain Ofgem (regulatory) approval and are subject to a market consultation before the binding auction phase can be launched,” said Duffin.
Grain LNG in addition to being the largest regasification terminal in Europe is also the only one in the UK able to process the full global range of LNG.
As a completely independent operator, Grain provides 40 percent of the UK’s LNG capacity, offering two entry points to the National Balancing Point gas market and cost-effective access to Northwest Europe.
Grain LNG already has plans for up to 300 gigawatt hours per day, or around 7.2 million tonnes per annum of LNG, of redelivery capacity and 380,000 cubic metres of associated storage, to be made available from mid-2025.
The expansion will increase the size of storage at the terminal, located on the Isle of Grain in Kent on the Thames-Medway estuaries, to about 1.2 million cubic metres.
Grain LNG also offers reloads, trans-shipments and a multi-bay facility for reloading road tankers and ISO containers.