Grain LNG terminal marks record month in December
National's Grid's Grain LNG Terminal sent out more gas than any other terminal in North West Europe last month (December).
14th January 2019 by Networks
Market conditions, a robust NBP price and anticipated lower variable costs, led to a record performance for December 2018. This is a stark contrast to December 2017, when the terminal only delivered gas above minimum send out on two occasions.
During 2018 a total of 26mt of additional LNG production hit the market and shipping charter rates reached a record high. These two factors resulted in traders delivering more LNG than expected to Europe as the differential available between European and Asian prices did not justify the additional shipping costs.
The gas price in the UK remained steadfast and as utilisation at the Grain terminal rose it is expected that variable costs on a per unit basis would have decreased significantly as the terminal typically operates more efficiently at higher send out as per the design basis.
In addition, processing costs in the UK, where nitrogen is often added to the LNG to meet UK gas specification requirement, are to some extent fixed. Higher utilisation therefore translates into lower per unit costs and potentially higher profits.
Simon Culkin, import terminal manager, said: “We are delighted to see such high utilisation at our terminal and proud of our consistent performance and ability to deliver our customer nominations after a long period of low activity.”
Other UK terminals have also seen increased activity, with South Hook accepting their first ever cargo from the US.
Grain LNG is currently the only UK terminal in the UK which is capable of accepting the full range of global LNG due to its extensive nitrogen processing plant.
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