With the UK’s dependency on gas imports forecast to rocket, liquefied natural gas (LNG) is set to play an increasingly important role in the secure supply of gas to Britain’s homes and businesses.Traditionally, the UK has used North Sea gas sources to meet demand, but these supplies are in decline, so we’re becoming more reliant on gas sourced from elsewhere. In fact, it’s estimated that by 2030 over 60% of UK Gas will be imported – and the best way to achieve that is by using LNG.What is LNG and what are its benefits?When natural gas is chilled to below -161ºC it becomes a liquid (LNG). The great thing about gas in liquid form is that it takes up 600 times less space than in its gaseous form, so it makes economic sense to use LNG for storing large volumes of gas and transporting them over large distances. What’s more, when it’s stored at such a low temperature the gas doesn’t burn, so it’s not surprising that the global LNG industry has a good safety record.The terminal now has the capacity to store one million cubic metres of LNG and to meet around 20% of UK gas demand. What does the terminal do?Our Grain LNG terminal has five main functions:
How does the LNG market work?LNG enables large amounts of gas to be transported from places such as Algeria, Trinidad and the Middle East to LNG terminals around the world. The LNG market is price driven and where these tankers go is normally dictated by contracts, price and the global economy.Key facts:Grain is an independently owned multi-user terminal in which no one customer has any priority rights.All importation capacity is sold under long-term take or pay contracts which fully under-write the investment.This includes the right to berth and unload up to 236 vessels a year.Current customers are BP, Iberdrola, Sonatrach, Centrica, E.ON and GDF Suez.Customers decide the level and timing of LNG imports and the amount sent out into the NTS (currently ~15% utilisation).Through contracts with third-party providers, Grain LNG has the capability to blend LNG from a wide variety of sources to meet the UK gas specification.Any plans for further expansion?At present, customers with long-term capacity contracts have primary use of our terminal but if they choose not to use a particular berthing slot for commercial reasons, we offer it to the wider market.We are now exploring options, and have planning consent and regulatory approval, for a further phase of expansion. These are based on using an open season process enabling LNG market participants to bid for the right to berth LNG carriers and unload LNG into the facility.