UK proves to be strong market for LNG with National Grid terminal posting regas record
National Grid of the UK said its Isle of Grain import terminal on the Medway River southeast of London sent out more regasified LNG last month than any other facility in Northwest Europe.
The Grain LNG terminal operator said that market conditions and a robust UK benchmark National Balancing Point natural gas price led to a record performance for December 2018.
“This is a stark contrast to December 2017, when the terminal only delivered gas above minimum send out on two occasions,” said Grain LNG.
“This winter, the UK has proved to be a strong market for LNG sellers looking to home excess LNG resulting from various supply projects coming on line,” said the company.
Grain LNG is currently the only UK terminal capable of accepting the full range of global LNG due to its extensive nitrogen processing plant.
“The UK has a more stringent Wobbe limit than most of Europe but plans are underway to relax this, which should lead to a significant reduction in costs as well as ensuring LNG is able to enter any of the UK terminals,” said the UK operator.
Other UK terminals have also seen increased activity, with both terminals in Milford Haven in Wales, the South Hook facility and the Dragon terminal, accepting many cargoes.
“We are delighted to see such high utilisation at our terminal and proud of our consistent performance and ability to deliver our customer nominations after a long period of low activity,” said Simon Culkin, the Grain LNG terminal manager.
The UK terminal noted that during 2018 a total of 26 million tonnes of additional LNG production hit the market and shipping charter rates reached a record high.
“These two factors resulted in traders delivering more LNG than expected to Europe as the differential available between European and Asian prices did not justify the additional shipping costs,” explained Grain LNG.
“The gas price in the UK remained steadfast and as utilisation at the Grain terminal rose it is expected that variable costs on a per unit basis would have decreased significantly as the terminal typically operates more efficiently at higher send-out as per the design basis,” it added.
