UK equity fund Ancala buys stake in UK LNG import terminal from Petronas of Malaysia

Wednesday, 03 July 2019
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Ancala Partners, a London-based private equity fund, has acquired a 50 percent stake in the UK Dragon LNG import terminal in Milford Haven in Wales from Malaysian energy company Petronas.

The Petronas stake was sold for an undisclosed amount and Ancala’s partner in the LNG terminal will be Royal Dutch Shell.

Petronas was an original investor in the Dragon LNG facility with BG Group of the UK.

The Dragon facility came on line in 2009 alongside the existing South Hook LNG terminal, owned by Qatar Petroleum and ExxonMobil.

Shell then became a stakeholder in the terminal when it acquired BG in 2016.

The Dragon terminal is one of three LNG regasification facilities in the UK, the third being the Isle of Grain facility southeast of London, owned by National Grid.

The terminal has a gas send-out rate to the National Transmission System of up to 9 billion cubic metres of natural gas, or around 6.5 million tonnes of LNG.

Facilities at the terminal were recently enhanced through commissioning of a small-scale reliquification plant.

Petronas will continue to be a customer of the Dragon terminal as a counterparty to a long-term throughput agreement.

“Dragon LNG is well placed to benefit from reducing UK gas storage capacity and maturing North Sea gas production,” said Lee Mellor, a partner at Ancala.

“With revenues underpinned by a long-term availability-based throughput agreement with Shell and Petronas, the transaction represents an attractive addition to our portfolio and expands our midstream infrastructure activities,” added Mellor.

UK-based international law firm Dentons said it advised Petronas on the transaction.

The Dentons team was led by UK Energy partner Humphrey Douglas and supported by Energy senior associate Daniel Saville and associate Michael Walton.

Dentons added that PwC UK Corporate Finance acted as the financial advisor on the deal, led by Jon Shelley and Tom Copeland, and supported by David Isaacs.

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