ISLE OF GRAIN, England: Tankers laden with liquefied natural gas (LNG) have started docking at a new terminal near London as Britain boosts its gas imports to make up for sliding output from maturing North Sea fields. Three cargoes from Algeria, each carrying enough gas to supply London for nearly a week, have landed at National Grid’s Isle of Grain terminal on the Thames Estuary since it opened in July, plant officials said on Thursday.
Grain’s imports of LNG, Britain’s first for twenty years, will help ease concerns that a freezing winter could stretch gas supplies.
UK gas supplies are tightening as North Sea flows drop. Forecasters this week warned the country to prepare for the coldest winter for a decade.
“The grid has some concerns about this winter,” said Grain LNG site manager Ian Belmore. “Grain being available gives some comfort,” he told Reuters at the plant.
LNG is natural gas frozen into liquid form. On arrival at Grain it is processed back into normal gas and pumped into the national pipeline network for use by consumers.
LNG coming into Grain is for energy major BP and Algerian state producer Sonatrach which own all the import capacity available under phase one of the terminal.
National Grid are to build a second phase which will triple throughput to 10.5mn tonnes a year – about 12% of UK gas demand – by the winter of 2008.
The second phase capacity has been bought by Centrica, Gaz de France and Sonatrach.
The Grain terminal is set up to receive one cargo a week but that volume has yet to be reached as suppliers have steered cargoes to more attractively priced markets like Spain and the US, according to industry sources.
“We can expect more ships to load into the Isle of Grain during the winter because of peak demand,” said David Cox, the managing director at Ilex, a U.K. energy consulting group, in a phone interview. “BP and Sonatrach have the option to sell the shipping slots if they don't use it so we may see other suppliers coming into the U.K. gas market.”
Technical advances have forced down the cost of LNG, kicking off a global commodity market.
“LNG is potentially available from around the world,” said Ian Davis, director of Grain LNG. “UK gas demand is expected to grow by 15% in the next 10 years, by 2010 imports (of LNG and pipeline gas) will make up 50% of all gas (in the UK).”
National Grid is the first of three LNG import projects to be developed in response to Britain’s tightening market. Two plants are to be built at Milford Haven in South Wales by 2007, importing LNG from producers including Qatar and Egypt.
The UK Office of Gas and Electricity Markets, or Ofgem, which regulates the industry, said gas imports in the six months through March into Grain may reach 17mn cu m a day from a “base case” level of 13mn cu m. – Agencies |
