National Grid has agreed to sell Europe’s largest liquefied natural gas terminal to British Gas owner Centrica and Energy Capital Partners, in a deal worth £1.5 billion.
The two firms will be acquiring the Isle of Grain terminal in Kent.
Grain imports and stores gas from around the world, and connects it to the European energy market. Its customers include Centrica, Shell, and Qatar Energy.
To transport gas on ships it has to be chilled to around minus 162C, turning it into liquified natural gas (LNG). This can then be put into specialised container ships and moved around the world.
LNG has become increasingly important to the Europe’s gas supply since pipeline imports from Russia were cut off following the country’s invasion of Ukraine.
It supplied some 15% of the UK’s gas demand last year, but this is forecast to swell to about 60% by 2050.
After taking into account some £1.1 billion worth of project finance debts on Grain’s balance sheet, Centrica’s equity investment totals about £200 million, it said.
National Grid, which runs much of Britain’s electricity grid, had been looking to sell the asset as part of broader efforts to offload parts of its portfolio to help fund investment plans.
Centrica chief executive Chris O’Shea said: “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.”
The acquisition comes soon after Centrica announced it was investing £1.3 billion for a 15% stake in the new Sizewell C nuclear power plant in Suffolk.
Mr O’Shea said that, combined with the Grain acquisition, “demonstrates the attractiveness of the UK as an investment location underpinned by supportive government investment policies”.
The acquisition is expected to complete during the final three months of 2025, subject to it being approved by regulators.
Russ Mould, investment director at AJ Bell, said: “National Grid’s decision to sell its Grain LNG business to British Gas owner Centrica and an accompanying infrastructure investor reflects the company’s increased focus on its electricity networks.
“The company is investing huge sums in this area and the deal will provide a useful injection of capital.
“For its part, Centrica is acquiring a strategically important asset which offers long-term cash flow linked to inflation, so this looks like a deal which could be a win for both parties.”
