31st Mar 2005 07:01
National Grid Transco PLC31 March 2005 31 March 2005 National Grid Transco announces £355 million expansion of Isle of Grain LNG importation terminal National Grid Transco plc (NGT) today announces a new £355 million investment totriple the capacity of its Isle of Grain Liquefied Natural Gas (LNG) importationterminal in Kent, owned and operated by its subsidiary, Grain LNG Limited. This second phase of development will increase the facility's capacity to importand process LNG from 3.3 million tonnes per year to 9.8 million tonnes per year,representing around 12 per cent of the UK's annual gas demand, and is expectedto commence operations in late 2008. The additional investment in Grain LNG is underpinned by 20 year contractssigned with Centrica, Gaz de France (GdF) and Sonatrach for the additionalcapacity. It also includes a lump-sum turnkey contract with CB&I John Brown toconstruct three new LNG storage tanks and associated works required for thisexpansion. This follows on from the first phase of development at Grain, where3.3 million tonnes capacity of LNG per year was acquired in 2003 by BP/Sonatrachunder a 20 year agreement. Commenting, Edward Astle, Group Director of NGT's Non-Regulated businesses,said: "As Britain moves progressively from being an exporter to a significant importerof natural gas, it is vital that the infrastructure is in place to meet thenation's gas requirements. NGT has been a leader in enabling the import ofliquefied natural gas. This expansion of our Isle of Grain facility will bringour total investment in liquefied natural gas infrastructure to some£500 million. It will triple Grain's capacity and help ensure liquefied naturalgas can play its full part in meeting Britain's future energy needs, as well asdiversifying the source of gas supplies for the country." The Isle of Grain facility has been associated with LNG storage capacity sincethe early 1980s. In 2003 NGT announced an investment of £130 million in thefirst phase of converting the site into a LNG importation facility, to enableLNG tankers to berth, unload and store LNG, prior to its regasification andnomination of gas for delivery into the UK's National Transmission System. Itwill come on stream this spring, representing around 4 per cent of the UK'sannual gas demand. Cautionary statement This announcement contains certain statements that are neither reportedfinancial results nor other historical information. These statements areforward-looking statements within the meaning of Section 27A of the SecuritiesAct of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,as amended. Because these forward-looking statements are subject to assumptions,risks and uncertainties, actual future results may differ materially from thoseexpressed in or implied by such statements. Many of these assumptions, risks anduncertainties relate to factors that are beyond National Grid Transco's abilityto control or estimate precisely, such as delays in obtaining or adverseconditions contained in regulatory approvals, competition and industryrestructuring, changes in economic conditions, currency fluctuations, changes ininterest and tax rates, changes in energy market prices, changes in historicalweather patterns, changes in laws, regulations or regulatory policies,developments in legal or public policy doctrines, the impact of changes toaccounting standards, technological developments, the failure to retain keymanagement, the availability of new acquisition opportunities or the timing andsuccess of future acquisition opportunities. Other factors that could causeactual results to differ materially from those described in this announcementinclude the ability to continue to integrate the US and UK businesses acquiredby or merged with the Group, the failure for any reason to achieve reductions incosts or to achieve operational efficiencies, unseasonable weather impacting ondemand for electricity and gas, the behaviour of UK electricity marketparticipants on system balancing, the timing of amendments in prices to shippersin the UK gas market, the performance of National Grid Transco's pension schemesand the regulatory treatment of pension costs, the impact of the proposeddisposal by National Grid Transco of four of its UK gas distribution networksand any adverse consequences arising from outages on or otherwise affectingenergy networks owned and/or operated by National Grid Transco. For a more detailed description of these assumptions, risks and uncertainties,together with any other risk factors, please see National Grid Transco's filingswith the United States Securities and Exchange Commission (and in particular the"Risk Factors" and "Operating and Financial Review" sections filed with its mostrecent annual report on Form 20F). Recipients are cautioned not to place unduereliance on these forward-looking statements, which speak only as of the date ofthis announcement. National Grid Transco does not undertake any obligation torelease publicly any revisions to these forward-looking statements to reflectevents or circumstances after the date of this announcement. Contacts National Grid Transco InvestorsAlexandra Lewis +44 (0)20 7004 3170 +44 (0)7768 554879(m)David Campbell +44 (0)20 7004 3171 +44 (0)7799 131783(m)Richard Smith +44 (0)20 7004 3172 +44 (0)7747 006321(m)Bob Seega (US) +1 508 389 2598 MediaClive Hawkins +44 (0) 20 7004 3147 +44 (0) 7836 357173(m)Christine Riches +44 (0) 13067 48596 +44 (0) 7785 508661(m)Chris Mostyn +44 (0) 1926 655275 +44 (0) 7879 668025(m) Citigate Dewe Rogerson +44 (0)20 7638 9571Anthony Carlisle +44 (0)7973 611888(m) Photographs of the Isle of Grain facility are available at www.newscast.co.uk Notes to Editors 1. Britain's Gas Import Demand Britain's annual gas demand is projected to increase by at least 15 per centover the next ten years. As production from North Sea gas fields declines,dependence on gas imports is forecast to approach 46 per cent by 2010. Government and industry forecasts recognise the need to secure long-term gasimports. LNG imports will also add to the diversity of gas supply and enable gasto be released into the system quickly to meet demand requirements. LNG is natural gas liquefied by refrigeration to a temperature of -160C. Thisprocess reduces its volume to 1/600th of that at normal temperature, enablingbulk and economic transportation by tanker. 2. Isle of Grain Terminal The Isle of Grain LNG site was established in the early 1980s as an LNG storagefacility, holding approximately 200,000 cubic metres. In 2003, planning permission was granted by Medway Council to convert the siteinto an LNG importation terminal. This resulted in the construction of adeep-water jetty on the River Medway estuary, to enable purpose built LNG ships,with LNG capacities of up to 205,000 cubic metres to dock. It also required theinstallation of new boil-off gas compressors, high efficiency vaporisers and a4.5km cryogenic pipeline to transport LNG from the ships to the tanks, as wellas converting the four existing LNG storage tanks for importation from LNGships. The first contract for use of Grain LNG's phase one capacity was signed inOctober 2003 with BP/Sonatrach, for the import of up to 3.3 million tonnes ofLNG per annum over 20 years. Planning permission was granted by Medway Council for the phase two developmentin September 2004. It will require the construction of three additional totalcontainment storage tanks of 190,000 cubic metres capacity each, bringing thetotal storage capacity of the terminal to approximately 770,000 cubic metres, aswell as associated vaporisation equipment and tie-ins to the existing LNGunloading and gas export systems. 3. Grain LNG Capacity Phase one development of the Grain LNG facility equates to an additional 12million cubic metres of gas entering the National Transmission System every day,or around 4.4 billion cubic metres per annum, representing around 4 per cent ofthe UK's current annual gas demand. Phase two development equates to an additional 23.5 million cubic metres of gasentering the National Transmission System every day, or around 8.6 billion cubicmetres per annum. Phase one and phase two developments together equate to an additional 35.5million cubic metres of gas entering the National Transmission System every day,or around 13 billion cubic metres per annum, representing around 12 per cent ofthe UK's current annual gas demand. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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