June 23, 2024
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OIL & GAS

Grain LNG Signs 10-Year Deal for Algerian Natural Gas

The largest liquefied natural gas terminal in Europe, Grain LNG, situated on the Isle of Grain in Kent, UK, has entered into a 10-year agreement to extend Algerian gas company Sonatrach’s long-term storage and redelivery capacity at the facility starting from January 2029.

With a tank capacity that ranks eighth globally and an expansive site spanning over 600 acres, Grain LNG is considered strategically vital for the UK’s energy infrastructure and supply security by National Grid.

The Grain LNG facility owned by National Grid is widely recognized as a crucial component of the UK’s energy infrastructure and plays an integral role in ensuring the country’s energy security.

Notably, this marks the initial accord for 125 gigawatt-hours per day of import capacity, which translates to roughly three million metric tons annually, through Grain LNG’s highly competitive auction process that was introduced in September 2023.

“The successful outcome of the auction further secures the future of Europe’s largest LNG import terminal into the next decade,” Oil Price.com quoted the UK’s National Grid saying in a statement.

“This agreement offers Sonatrach guaranteed access to Europe’s largest LNG import terminal, which helps line up Sonatrach’s long-term marketing strategy by diversifying its LNG markets,” said Mayouf Belgacem, Executive Vice President of Sonatrach.

Grain LNG is currently being expanded to store and deliver enough gas to meet up to 33% of UK gas demand.
The UK has recently seen a significant rise in LNG imports as Europe has diversified its LNG sources.

Elsewhere in Europe, Italy’s energy major Eni has been increasingly betting on Africa to import large volumes of pipeline gas and LNG to replace pipeline gas supply from Russia, which was Europe’s top gas supplier before the Russian invasion of Ukraine.

Eni has been particularly active in securing more natural gas supply for Europe from Africa and has fast-tracked projects in Africa to meet Europe’s gas demand in the absence of Russian pipeline deliveries.

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