Skangas has announced that it has signed a Letter of Intent (LoI) with National Grid Grain LNG. Under the terms of the LoI, Skangas is to source LNG at the Grain LNG import terminal on the Isle of Grain in the UK.
Skangas, which produces LNG, struck the deal with Grain LNG to ensure a reliable supply of LNG is available, which is critical to the fast-growing small-scale LNG market.
As a result of this recent development, Skangas becomes the first small-scale LNG supplier to enter into such an agreement with a UK-based import terminal. Grain LNG, which operates primarily as a large-scale import terminal, is firmly committed to developing an LNG break bulk marine facility to make it possible for small vessels to reload and bunker LNG.
Grain LNG is set to become the first facility in the UK to offer small-scale ship reloading facilities at its import terminal on the Isle of Grain. “We believe the best way to encourage growth in the market is to offer competitive alternatives which ensure security of supply for small scale market participants” said Nicola Duffin, Senior Commercial Manager at Grain LNG, who added “Grain LNG is excited to be at the forefront of developing this market in partnership with progressive companies such as Skangas ”.
The facility will include an extension to existing jetties to cater for break bulk marine LNG carriers up to 20 000 m3. This will meet the needs of Skangas’ fleet of LNG carriers.
“Skangas appreciates the opportunity to source LNG from the Grain LNG terminal,” says Dan Hramoff, Director of Business Development and Projects at Skangas. “This will improve supply to the small scale markets thus allowing to source LNG on more flexible and competitive terms. In the end, it will be reflected in improved offerings to our own LNG customers,” he concludes.
Skangas is quick to point out that by making LNG more readily available to the small-scale market from a variety of sources, the increased competition will create a more dynamic market, resulting in better, more cost-effective LNG supply for the market at large.
Skangas produces LNG at its plant in Risavika, South-Western Norway. However, the small-scale market is rapidly developing, and the plant’s annual production capacity of 300 000 tons has already been exceeded. The company requires external LNG sources, and has entered into several contracts with similar large-scale European hubs to source LNG.