The UK’s busiest liquefied natural gas (LNG) import terminal, South Hook LNG, has been granted a technical modification to its network entry agreement (NEA) and will be able to expand its imports sources, Kallanish Energy learns.
The joint venture between Qatar Petroleum (67.5% ownership), ExxonMobil (24.15%) and Total (8.35%) has applied to the Joint Office of Gas Transporters (JOGT) to increase the oxygen limit of the gas it receives.
The office, which handles the rules for transporting gas in the country, approved the proposal last Thursday.
According to the proposal filed, the previous “strict oxygen limit” was “unnecessary and restrictive to the efficient operation” of the terminal, located in Milford Haven, West Wales.
“Import dependency is expected to increase and with this, Great Britain can expect greater diversity in the gas composition of future cargoes. The current limit at South Hook LNG is at risk of being too restrictive to meet the composition of future cargoes, therefore it is in the interest of the UK gas market to better facilitate the delivery of LNG cargoes at Milford Haven,” the JV said.
It said the short-term solution to achieve diversification and security of supply was to allow a relatively modest increase in the oxygen limit at South Hook LNG.
“The UKCS decline, Groningen production cuts and the closure of Rough long-range storage facility are all resulting in an increase in GB’s gas import dependency,” it wrote, referring to falling regional supplies. “This modification supports this enhanced gas security of supply requirement.”
With capacity to handle 15.6 million tonnes of LNG per year, the terminal has been importing Qatari gas since it was fully commissioned in 2010.
But stronger Asian demand for Qatari LNG has diverted supplies and halved deliveries so far this year at South Hook to roughly 1.2 million cubic meters (MMcm). That is just 15% of 2016 volumes for the same period.
The company didn’t mention in the public documents where new supply would come from. It also declined to comment.
