LNG

European liquefied natural gas and wholesale pipeline gas prices soared by over 16 percent on the week while stronger Asian spot cargo values and higher global gas futures prices signalled a return of volatility to a market harbouring doubts about the stability of supplies.

WaveCrest Energy has announced the start of a market consultation process for a proposed Teesside Flexible Regas Port as the UK’s third liquefied natural gas import destination in advance of a planned capacity auction to be launched in the third quarter of 2024.

Clarksons, the UK provider of integrated maritime services including broking, finance and research has brokered the world’s first 174,000 cubic metres capacity LNG Forward Freight Agreement (FFA) trade with the Chicago Mercantile Exchange (CME) Group.

The US subsidiary of the UK’s National Grid Plc, which has several transmission and utility businesses in the US Northeast, has asked Massachusetts utility regulators to approve an agreement with US company Constellation Energy that would keep the Everett liquefied natural gas import terminal near Boston in operation until at least 2030 and beyond.

Europe’s largest liquefied natural gas import terminal, the UK’s Isle of Grain facility on the Medway River in Kent, has extended its capacity agreement with the Algerian national energy company Sonatrach.

Grain LNG, owned by a subsidiary of National Grid Plc, said a 10-year agreement was signed to extend the long-term storage and redelivery capacity of Sonatrach at the UK terminal from January 2029.

This is the first agreement signed for around 3 million tonnes per annum of capacity from Grain LNG’s competitive auction process which was launched in September 2023.

“The successful outcome of the auction further secures the future of Europe’s largest terminal into the next decade,” said the company.

The Grain LNG terminal, sited about 43 miles (69 kilometres) southeast of London, is currently expanding to store and deliver enough gas to meet up to 33 percent of UK gas demand.

Security

“This helps ensure the UK’s energy security as LNG imports play a critical role in making sure the UK has the gas it needs, when it needs it and providing a flexible and reliable supply to heat peoples’ homes and to complement the growth of renewable generation,” said Katie Jackson, President of National Grid Ventures, owner of the terminal.

“This agreement ensures that Grain will continue to have a diverse supplier base within the Atlantic Basin,” added Jackson.

“I am delighted that Sonatrach have once again shown a long-term commitment to our world-class site which UK consumers rely on, and I look forward to continuing our working relationship with them in the coming years,” she stated.

Mayouf Belgacem, Executive Vice President of Sonatrach, said LNG would continue to play a critical role in worldwide energy supply.

Algeria, the longest-standing global exporter of LNG supplies to Europe, operates two liquefaction and export plants at Skikda and Arzew on the Mediterranean Coast.

“We have expressed our willingness to strengthen our position as a long-term partner of Grain LNG and as a substantial contributor to UK gas security of supply,” Belgacem explained.

Guaranteed access

“Besides, this agreement offers Sonatrach guaranteed access to Europe’s largest terminal which helps line up Sonatrach’s long-term marketing strategy by diversifying its markets,” said the Sonatrach executive .

The Isle of Grain terminal had launched its auction for 9 MTPA of existing capacity and Sonatrach has now been a leading beneficiary.

There is also an expansion project underway at the UK facility that will see LNG storage at the terminal increase in 2025 to around 1.2 million cubic metres.

In the past 12 months the UK terminal has unloaded almost 120 carriers originating from multiple countries.

In addition to Algerian volumes, the terminal has received cargoes from the US, Qatar, Angola, Nigeria, Norway, Peru and Trinidad and Tobago.

Grain LNG, as part of the National Grid Ventures subsidiary, operates outside of National Grid’s core regulated businesses in the UK.

National Grid Ventures has a diverse portfolio including subsea electricity interconnectors, competitive transmission, wind and solar generation, battery storage as well as the Grain LNG storage and regasification infrastructure.

National Grid Plc, the UK power transmission and infrastructure company with several businesses in the US and the Isle of Grain LNG import near London, reported declines in fiscal first-half profits while investments in projects increased amid a more positive winter energy outlook for the UK and its near neighbours.

The North Sea Transition Authority (NSTA) is awarding 27 new oil and gas licences aimed at strengthening domestic energy security as a necessary back-up for renewables and to help reduce the mounting import bill for pipeline natural gas, LNG and oil.

A total of 27 licences have been offered in quicker-to-production areas with more to follow subject to additional environmental checks.

According to Offshore Energy UK (OEUK), the trade body for the sector, around 220,000 jobs are supported by the current offshore industry fields.

UK energy data

OEUK has also provided valuable data on the state of the North Sea oil and gas industry and to fill the gap in educated-understanding among sections of the public about the necessity of hydrocarbon energy and its benefits.

Licensing is the first step taken by energy production companies with the regulator to find and produce domestic supplies.

However, each licence does not represent a new oil field. It’s simply that energy companies require licences for a range of activity in so-called “blocks” which are carefully mapped sections of the seabed in UK waters.

These start from seismic and initial exploratory work through to production, either near existing infrastructure in previously known fields or in new fields.

“Licencing is a normal part of most energy production regimes and is used in the UK to manage the development of oil and gas, wind and most recently, carbon capture projects,” said OEUK.

“It is part of a bigger process which companies must undertake to explore, analyse, produce and then eventually decommission energy production,” the group added.

Around 75 percent of the UK’s current energy needs are provided by oil and gas.

The UK is a net importer of oil and natural gas, meaning it consumes more than it produces domestically.

Field numbers

“There are currently 284 active oil and gas fields in the North Sea and by 2030 around 180 of those will have ceased production due to natural decline,” OEUK explained.

The industry, thus, needs the churn of new licences to ensure no cliff-edge is reached in domestic production.

“We all recognise that our energy system must change and our industry includes companies that are expanding into renewables while using their expertise to pioneer ever cleaner energy production,” said OEUK Chief Executive David Whitehouse.

“The reality of the energy transition is that we need both oil and gas and renewables in an integrated system to protect the UK’s energy needs over the coming years,” Whitehouse added.

“Last year filling the fuel import gap cost the UK £117 billion ($142Bln). That’s a lot of money spent supporting the economic growth of other producing countries. With careful management and collaboration, the UK can become the gold standard of energy transitions. We can drive economic growth, reach our climate goals and avoid a future where we increasingly import our energy and export our jobs,” he explained.

Europe’s largest liquefied natural gas import terminal, the UK’s Isle of Grain facility on the Medway River in Kent, has launched an auction for 9 million tonnes per annum of existing capacity.

July 19 (LNGJ) - National Grid plc, whose strategic and widespread assets include the UK Isle of Grain LNG import terminal, has agreed to sell a further 20 percent equity interest in the UK gas transmission and metering business to the existing majority owners, a consortium of long-term infrastructure investors led by Macquarie Asset Management of Australia. The extra 20 percent will give the consortium 80 ownership of the UK gas transmission assets subject to regulatory clearance.

   Martin Bradley, European Head of Infrastructure for Macquarie Asset Management, said the additional investment underlines the group’s commitment to the UK's energy system. “We have been working closely with the National Gas team since January as they have continued to meet the energy needs of millions of households and businesses. We are pleased to continue our strong relationship with National Grid, and aspire to acquire the remaining interest in due course,” Bradley said.

Europe’s largest liquefied natural gas import terminal, the UK’s Isle of Grain facility on the Medway River in Kent, has launched a consultation to auction 9 million tonnes per annum of existing capacity.