UPDATE: Centrica confirms buying National Grid gas import terminal
Centrica PLC and Energy Capital Partners LLP have agreed to buy the Isle of Grain liquefied natural gas terminal in Kent, England from National Grid PLC, the companies said on Thursday.
The announcements confirmed a report in the Financial Times on Wednesday.
Berkshire, England-based Centrica, which owns British Gas, together with ECP, a specialist investor in renewable energy infrastructure, agreed to buy the LNG terminal, the UK’s largest, for an enterprise value of £1.5 billion. Of this, £1.1 billion is new non-recourse project finance debt, so the equity investment is £200 million for each of Centrica and ECP.
London-based National Grid said the disposal will allow it to focus on its electricity networks in the UK and US, as part of the streamlining plans it announced last year. It said total proceeds from the sale will be £1.66 billion when including a pre-completion dividend.
Centrica already owns the Rough gas storage site off the coast of Yorkshire and has recently agreed to take a 15% stake in the Sizewell C nuclear power plant being built in Suffolk.
The Isle of Grain gas import terminal, on the Thames estuary in Kent, is the largest liquified natural gas import terminal in Europe with capacity to process 15 million tonnes per year of gas, or about 20% of the UK‘s demand.
‘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,’ Centrica Chief Executive Chris O’Shea said.
He added: ‘Our decision to commit £3 billion of capital in both Sizewell C and the Isle of Grain demonstrates the attractiveness of the UK as an investment location underpinned by supportive government investment policies.’
Centrica said the Grain LNG terminal acquisition underpins its target for a run-rate of earnings before interest, tax, depreciation and amortisation of £1.6 billion by the end of 2028. Its share of Ebitda from the terminal is expected to be £100 million per year, with around £20 million in cash distributions from that. The Grain terminal recorded £178 million in Ebitda on £299 million in revenue in 2024.
Shares in Centrica were up 2.2% to 165.65 pence each in London on Wednesday. National Grid was up 1.3% to 1,046.50p.
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