Teesside LNG terminal to make Britain more self sufficient

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Global commodities trading company, Trafigura, is to reopen the Teesside LNG (liquefied natural gas) terminal.

Trafigura have taken on the lease for the site from PD Ports and expect to invest around $30m, which will boost UK energy security and reduce reliance on imported Russian gas. It aims to open in mid-2018.

The terminal will accept floating storage and re-gasification units (FSRU), allowing Trafigura to avoid around $1bn in costs associated with building a new LNG import terminal.

The terminal was previously opened and operated by Excelerate Energy and mothballed since 2015.

The move comes as the UK relies more and more heavily on imported gas supplies. One FSRU can supply around 5% of UK gas needs for up to a week.

UK gas breakdown

  • 35% – produced in the UK
  • 40% – Norway via interconnector
  • 20% – Qatar LNG shipments
  • 5% – Belgium and Holland interconnectors

Re-energising the region

Hadi Hallouche, head of LNG trading at Trafigura, said Teesside LNG would ‘increase the UK’s supply security’ and that it ‘plans to invest in other terminals where it sees potential demand’.

David Robinson, CEO of PD Ports, said: “This is a major investment for Teesside and significantly reinforces the attraction of Teesport and the region’s wider supply chain to support the successful development of large-scale, long-term energy infrastructure projects of this kind.

“This announcement is another important step in positioning Teesport as a major energy hub for the UK, driving economic growth and complementing this leading industrial platform. It is also testament to the high level of confidence towards investment in Teesside.”

Jon Gluyas, professor of geo-energy at the Durham Energy Institute at Durham University said: “At times, in recent years, we have been down to a 1% margin and forced to rely on imports from the Belgian interconnector – which is essentially Russian gas.

“While only about 5% of our gas comes from Russia it is that vital component, one that can be the difference between having enough and having too little.

“Whilst small in overall context this 5% is a critical supply component and at times in recent years notices have gone out to businesses warning them of the need to reduce their demand.”

A new LNG import terminal is planned for Barrow in Cumbria (we already have two major terminals at Isle of Grain and Milford Haven).

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