U.K.-based energy company Centrica and U.S. investment firm Energy Capital Partners (ECP), part of Bridgeport Group, have set the wheels in motion to acquire the liquefied natural gas (LNG) terminal in Kent County, U.K., from the National Grid group , a British electricity and gas utility.
While the enterprise value for the acquisition of Grain LNG is said to be £1.5 billion, Centrica disclosed that its 50% share will amount to around £200 million after approximately £1.1 billion of new non-recourse project finance debt is taken into account.
The UK player describes the facility as Europe’s largest LNG regasification facility, boasting a capacity of 15 million tonnes of LNG a year. The acquisition is said to be in line with the company’s strategy of investing in regulated and contracted assets supporting the energy transition.
Tyler Reeder , ECP’s President and Managing Partner, noted: “With the emergence of the U.S. as the global leader in low-cost LNG supply and the growing need for reliable natural gas supply across the UK and Europe, we believe Grain LNG will increasingly be relied upon as critical infrastructure to deliver dependable energy to local markets.”
Situated on the UK’s Isle of Grain, the terminal features unloading infrastructure, regasification equipment, and truck-loading facilities. It has two jetties, the first one being capable of unloading LNG tankers with a 70,000–217,000 cubic meters (cbm) cargo capacity (QFlex) and the second carriers from 125,000 cbm to 266,000 cbm cargo capacity (QMax).
Late last year, the terminal was undergoing expansion to store and deliver enough gas to meet up to 33% of the UK’s gas demand, aiming for 1.2 million tonnes of tank space in 2025 – ten years after the start of operations – compared to the 1 million at the time.
The UK player believes the project has the potential to create additional near-term value, with future development options including a combined heat and power plant, bunkering, hydrogen, and ammonia.
“The Isle of Grain terminal is a strategic asset that will support the UK’s energy security for many decades to come, keeping energy flowing reliably and affordably to households and businesses across the country as we transition to net zero. That’s why we are so pleased to be investing, continuing Centrica’s pivot towards long-term, predictable infrastructure cash flows, underpinning our medium-term guidance and creating valuable future options,” said Chris O’Shea , Group Chief Executive of Centrica.
Subject to customary government and regulatory approvals, the National Grid expects the transaction to complete later this year. The utility describes this as another important step in delivering the strategy to streamline its business and focus on networks.
The proposed acquisition is also in line with Centrica’s efforts to grow its LNG portfolio. A previous development in this regard happened in late June, when the company signed a heads of agreement (HoA) with Thailand’s PTT to purchase LNG for ten years. Deliveries are expected to start in 2028.