Centrica, the parent company of British Gas, has acquired the Isle of Grain liquefied natural gas (LNG) terminal in Kent from National Grid for £1.5 billion. This strategic move underscores Centrica’s commitment to enhancing the UK’s energy security, even as domestic gas demand continues to decline.
Key Details of the Acquisition:
- Partnership: Centrica has partnered with U.S.-based Energy Capital Partners (ECP) for this acquisition. Centrica holds a 50% equity stake, contributing approximately £200 million, while the remaining £1.1 billion is financed through non-recourse project debt.
- Capacity: The Isle of Grain terminal is Europe’s largest LNG import facility, with a throughput capability of 15 million tonnes per annum, accounting for about 20% of the UK’s gas demand.
- Strategic Importance: Centrica views this acquisition as a long-term investment in infrastructure that will support the UK’s energy security during the transition to net-zero emissions. The terminal’s secure, inflation-linked income streams, with all capacity contracted through at least 2029, make it a valuable asset.
Context:
- Declining Gas Demand: Despite the strategic acquisition, the UK experienced a significant decline in gas demand last year, reaching a 30-year low. This trend is attributed to factors such as increased energy efficiency and a shift towards renewable energy sources.
- National Grid’s Strategy: The sale aligns with National Grid’s strategy to focus on electricity infrastructure, having previously announced plans to divest from gas assets.
Outlook:
The acquisition positions Centrica as a key player in the UK’s energy landscape, balancing the transition to renewable energy with the continued role of natural gas in the energy mix. The deal is expected to close by the end of 2025, pending regulatory approvals.
REFH – Newshub, 15 August 2025
Recent Comments