Page 6 - GLNG Week 45

GLNG COMMENTARY GLNG
Grain LNG considers expansion as open season continues
An open season to gauge interest in capacity at the UK’s Grain LNG facility started earlier this month, as the terminal prepares for the expiry of current contracts
PERFORMANCE
WHAT:
Grain LNG is holding an open season for new capacity at the terminal from 2025.
WHY:
The existing contracts that underpinned the plant’s development are coming up for expiry, and new capacity may also be built.
WHAT NEXT:
Customers may opt to take on shorter-term capacity as the global LNG market shifts away from long-term contracts.
THE National Grid Grain LNG import terminal in the UK is soliciting customer interest in capac- ity that will be available from 2025. Grain LNG launched an open season earlier this month, offering a mix of existing and new-build capacity as it looks ahead to the expiry of the long-term contracts that originally underpinned the devel- opment of the plant.
The open season will run until March 10, 2020, with Grain LNG expecting to allocate capacity by the end of that month. The operator is also soliciting feedback from customers on its new open season process during an initial con- sultation phase that will run up to January 10, 2020. Bids placed during the open season would be legally binding. The company cited positive feedback in response to a recent “expression of interest” (EoI) exercise, which led it to offer two distinct options in this open season to would-be customers – base user and package user.
Grain LNG, which is located on the Isle of Grain in Kent, England, said in a statement that the base user option was designed for parties seeking to take on a significant amount of capac- ity at the plant under a 15-25-year contract. Base users will be entitled to 48 berthing slots, 200,000
cubic metres of working storage and a regasifica- tion capacity of 140 GWh per day, it said, adding they would have the flexibility to store and send out LNG as required.
The package user option, meanwhile, offers customers a series of 10-day packages under which they would be able to berth, unload, store and send out LNG with no minimum send-out requirement. Package users would have access to 9, 18 or 27 berthing slots per year, working stor- age of up to 180,000 cubic metres and 120 GWh per day of regasification capacity for a period of 10 days. “The package user will have maximum optionality in deciding when to bring cargoes to the UK,” Grain LNG said.
The availability of the package user option illustrates the broader move away from long- term contracts in the LNG market, as flexibility becomes increasingly sought after by players in the industry. This has been spurred by a drop in global LNG spot prices, with some buyers of the fuel becoming more hesitant to commit to long- term contracts as a result.
Capacity increase
If sufficient bids for capacity placed, this could
Grain LNG’s capacity will be expanded if there is sufficient customer interest.
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w w w . N E W S B A S E . c o m Week 45 14•November•2019