LNG

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.

UK major BP has entered its third long-term liquefied natural gas offtake contract from the Woodfibre LNG project in the Canadian Pacific Coast province of British Columbia.

“With the additional contract to offtake 450,000 tonnes of LNG per year for 15 years on a free on-board (FOB) basis, all of the LNG production from the Woodfibre LNG export facility is now committed for sale to BP,” said the London-based company.

Woodfibre LNG is a Canadian subsidiary of the Asian group, Pacific Energy Corp. Its main offices are in Singapore and with others in Jakarta, Beijing and Hong Kong.

The latest deal takes BP’s offtake total to 1.95 million tonnes per annum and the remainder on a flexible offtake basis from the plant being built near the town of Squamish in BC.

The North American pipelines and energy company Enbridge is investing to own 30 percent of the C$5.1-billion (US$3.75Bln) Woodfibre project scheduled to enter service in 2027.

Enbridge and Pacific Energy announced that deal in July 2022. Woodfibre LNG will produce a total of 2.1 MTPA of LNG and will have 250,000 cubic metres of storage capacity.

Engineering

The project is now fully underpinned by the long-term offtake agreements with BP. Woodfibre LNG has engaged global engineering and construction company McDermott International to constructed the Woodfibre facilities.

After the latest Woodfibre deal, BP said it continued to look for opportunities across the gas value chain as it sees LNG as an essential part of the energy transition and its own pivot to becoming an integrated energy company.

“As BP works towards building an LNG portfolio of 30 million tonnes by 2030, the additional Canadian west coast supply source expands BP’s flexible, high-quality LNG portfolio and further enhances the company’s capability to meet the growing global natural gas demand,” BP explained.

In addition to securing LNG offtake rights from the project, BP added that it would provide “safe and reliable transportation of gas” to the Woodfibre LNG export facility during the 15-year contact term.

“As the world seeks secure, affordable and lower carbon energy, global demand for LNG is expected to continue to grow and this additional Canadian supply source will further enhance bp’s supply positions in the Pacific region,” said Jonathan Shepard, Vice President for Global LNG Trading and Origination at BP.

“We look forward to continuing our close collaboration with Woodfibre LNG,” stated Shepard.