- In a virtual ceremony, Qatar Petroleum’s Qatar Terminal Limited and National Grid’s Grain LNG signed an agreement for LNG storage and redelivery capacity
- The agreement will prove beneficial for National Grid bringing its future annual throughput capacity to 25 billion cubic meters of natural gas
- The Isle of Grain LNG Terminal has the capacity of 1,000,000 cubic meters of LNG and is regulated by Ofgem
A long-term agreement of 25-years for LNG storage and redelivery capacity has been secured between Qatar Petroleum’s Qatar Terminal Limited (QTL) and National Grid’s Grain LNG of the United Kingdom.
The Minister of State for Energy Affairs, President and CEO of Qatar Petroleum, H E Saad Sherida Al Kaabi, and Jon Butterworth, the Managing Director and Chief Executive Officer of National Grid Ventures signed the agreement in an e-ceremony that was held on 13 October 2020. It marked the conclusion of Grain LNG’s Open Season process, which was started in November 2019. A senior executive from both the parties was present in the ceremony.
By subscribing to the equivalent of up to 7.2 million tons per annum (MTPA) of the terminal’s future throughput capacity, from mid-2025, the QP affiliate will be able to utilise the Isle of Grain LNG.
The agreement will prove beneficial for National Grid with respect to the expansion of facilities with an additional tank and associated vaporizer capacity, driving the company in achieving a throughput capacity of 25 billion cubic meters of natural gas in future.
The Isle of Grain LNG Terminal
The Isle of Grain LNG Terminal, which is located on the UK’s southeast coast in Kent, began its operations in 2005 and is regulated by the Office of Gas and Electricity Markets (Ofgem). Presently, the terminal has the capacity of 1,000,000 cubic meters of LNG, which is spread across 8 tanks, to store and deliver enough gas to meet at least one-fourth of the UK’s gas demand. Having an annual throughput capacity of 20 billion cubic meters of natural gas, the terminal is operated by National Grid Grain LNG Limited. The company has over 30 years of experience in the LNG industry and is a best in class safety record.
Leaders View on Agreement
Minister Al Kaabi stated that by entering into the agreement, QP has reaffirmed their commitment to the UK’s gas market and is of the belief that it will facilitate the UK with LNG as a reliable, economical, and environmentally friendly source of energy. The strong cooperation between Qatar and the UK in the field of energy was also highlighted by Al Kaabi. The agreement with Grain LNG will help QP in strengthening its position in support of advancing greater access to secure, flexible, and reliable gas supplies for all customers in the UK.
Jon Butterworth said that a critical role is played by LNG imports in the UK, which has the gas demands of the nation. The deal will ensure a flexible and reliable supply of gas, being offered to the UK by Grain LNG, to complement the growth of intermittent renewable generation.
National Grid PLC- 1 Year Return of 6.09 Per Cent
In FY 19-20, National Grid showed a resilient performance and delivered good operational progress with high levels of network reliability. The company reported an increase in the underlying profit by 1 per cent to £3.5 billion in comparison with the previous year.
(Source: Company’s Final Result Release)
But the Group is expecting that the underlying operating profit will be impacted in the FY 20-21 because of the Covid-19 pandemic. Factors such as higher levels of bad debt, additional direct Covid-19 costs, and deferral of rate increases will be affecting the US operations.
The company will be focusing on agreeing to a fair settlement for RIIO-2 with Ofgem. It remains committed to working towards enabling the energy transition in order to achieve the enhanced medium-term net zero emissions targets.
Share Price Performance
- recorded its 52-weeks high price of GBX 1,067.40 on 19 February 2020. The company continued to remain above the mark of 1,000 till the 1st week of March 2020. However, from 9 March 2020 onwards, the share price of the company started to fall, recording the 52-weeks low price of GBX 799.70 on 23 March 2020, on the day when the UK went into the lockdown restrictions after the Prime Minister Boris Johnson’s announcement. The company, however, showed some improvement in the latter half of June, fell a little in mid-July, trading below the 900 mark. But has recovered gradually.
The stocks of National Grid PLC (LON: NG.) were trading at GBX 939.80 on 16 October 2020 at 08:30 AM, up by 1.05 per cent from its previous close of GBX 930.00. The 52-week low/high price was reported to be GBX 799.70/1,067.40. It had a market capitalisation (Mcap) of £32,738.94 million. The company recorded a negative return on price, which was 2.15 per cent on YTD (Year to Date) basis.
LNG has been a reliable, economical, and environmentally friendly source of energy in the UK. The agreement signifies to be a significant milestone for the future of Europe’s largest LNG import terminal.