Centrica Selected as Partner in Canvey LNG Project
Centrica PLC
July 15, 2005
Centrica Selected as a Partner in Canvey LNG Project
Centrica plc today announced it has become a partner in the Canvey LNG project,
which proposes to convert an existing liquefied petroleum gas (LPG) terminal at
Canvey Island, Essex, into a liquefied natural gas (LNG) receiving facility.
Subject to planning consent and a decision to construct, Centrica would hold 20
per cent equity in the facility, together with capacity rights enabling it to
deliver LNG to British Gas customers from a range of international sources.
The Canvey LNG project, led by Calor Gas and including LNG Japan as a partner,
commenced in December 2004, with a feasibility study to develop a 5.4 billion
cubic metre (bcm) strategic LNG import and regasification facility at the
existing Calor LPG terminal, which would be capable of meeting 5 per cent of the
UK's annual gas demand. Following the study, Centrica has been selected as a
partner, with a full scale planning application and project plan now in
development.
As a 'brownfield' project, an operational facility at Canvey would see
significant cost savings compared to a greenfield site. Centrica's share of pre
development costs would be in the region of £1 million.
Canvey delivered Britain's first ever LNG supplies in 1964 and during its
operational lifetime received over 900 LNG cargoes. The proposal to convert the
site includes construction of two LNG storage tanks, reinforcement of the
existing jetty and a new connection to the National Transmission System. Subject
to planning approval, a decision to progress to construction is expected by the
end of 2006, with completion around the end of the decade.
The project is one of a small number of proposed or planned regasification
projects within the UK. Centrica's participation is part of its strategy to have
an interest in key stages of the gas chain. It intends to procure future
supplies for its British Gas customers from a range of international sources,
including LNG through contracts and investments in equity projects. In March,
Centrica signed a 20 year agreement to acquire regasification capacity at the
new Isle of Grain terminal in Kent, providing access to a potential annual
volume of 3.4 bcm of LNG from late 2008. A landmark 15 year deal signed in
August 2004 with Petronas is expected to provide an annual 3 bcm to British Gas
commencing between 2007-2008.
Sir Roy Gardner, Chief Executive of Centrica, said: 'Participation in the Canvey
project underlines our commitment to invest at key stages of the energy chain to
secure future supplies for our British Gas customers.
'This agreement gives Centrica the opportunity to participate in one of the few
planned or proposed regasification projects in the UK. In line with our strategy
of sourcing supplies from a range of international areas, an operational project
at Canvey would provide a gateway to import gas into the UK, as well as the
opportunity to deliver value from overseas equity projects.'
Notes to editors:
1/ LNG Japan is a joint venture between Sumitomo Corporation and Sojitz
Corporation.
Enquiries:
Centrica Investor Relations: 01753 494900
Centrica Media Relations: 01753 494085
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