The UK-based company is one of the largest natural gas distributors in the US northeast. While National Grid also operates the UK gas transmission network and owns the Isle of Grain LNG import terminal, located southeast of London, its US unit also owns utility businesses in areas such as Massachusetts and Rhode Island.
Gaz Metro will provide National Grid with significant volumes delivered in the form of LNG to supply its existing storage facilities.
The Quebec company will produce the LNG at its small-scale liquefaction plant in Montreal and deliver it across the border. The form of transport was not disclosed, though it could be trucked or sent by containers.
"LNG plays an important role in meeting the needs of our customers on the coldest days of the year," said John Vaughn, National Grid Vice President of Energy Procurement.
"Diversifying our LNG supply to fill our existing storage tanks and adding gas pipeline capacity in New England will help us better serve our customers for years to come," Vaughn added.
Martin Imbleau, Vice President, Development and Renewable Energies at Gaz Metro, explained the deal: "National Grid is a major player in the New England natural gas industry and, with these agreements, Gaz Metro is reinforcing its presence in the regional LNG market, not only in Quebec, but also in the northeast United States.
"These major LNG contracts are in addition to existing agreements with various companies like Société des traversiers du Québec (the Quebec ferry line with LNG-fuelled vessels), Transport Robert (Trucking), Stornoway Diamonds (mining) and other clients."
Gaz Metro, with more than 10,000 kilometres of underground pipelines in 300 Quebec municipalities, is supplying National Grid in the US from its Montreal liquefaction plant expansion.
The Quebec utility will increase the Montreal plant's liquefaction capacity from 3 billion cubic feet per annum to 9 Bcf. The $120 million expansion will be completed by the third quarter of 2016.