Centrica Buys Grain LNG Terminal for $2.04 Billion

Centrica plc, owner of British Gas, on Thursday announced the acquisition of the Isle of Grain liquified natural gas terminal (Grain LNG) in partnership with Energy Capital Partners LLP (ECP) from National Grid group (National Grid) for an enterprise value of $2.04 billion.

After taking into account approximately $1.49 billion of new non-recourse project finance debt, Centrica’s 50% share of the equity investment is approximately $271.49 million.

Grain LNG provides vital energy security for the UK, providing critical LNG import and export, regasification and rapid response gas storage capacity to balance the energy system.

The acquisition is aligned with Centrica’s strategy of investing in regulated and contracted assets supporting the energy transition, delivering predictable long-term, inflation-linked cash flows, with 100% of capacity contracted until 2029, over 70% until 2038 and over 50% until 2045.

Opportunities for efficiencies to create additional near-term value, and future development options including a combined heat and power plant, bunkering, hydrogen and ammonia. Strong life of asset returns aligned with Centrica’s financial framework, with an expected unlevered IRR of around 9% and an equity IRR of around 14%.

Underpins delivery of $2.17 billion end-2028 EBITDA target – Centrica’s share of EBITDA expected to be approximately $135.74 million per annum and cash distributions expected to be around $27.15 million on average per annum for 2026-2028, representing an attractive yield on Centrica’s equity investment.

Strategic Asset

Centrica’s Group CEO Chris O’ Shea said that the Isle of Grain terminal is a strategic asset that will support the UK’s energy security for many decades to come, keeping energy flowing reliably and affordably to households and businesses across the country as we transition to net zero.

Centrica’s decision to commit $4.07 billion of capital in both Sizewell C and the Isle of Grain demonstrates the attractiveness of the UK as an investment location underpinned by supportive government investment policies, Chris said.

“That’s why we are pleased to be investing, continuing Centrica’s pivot towards long-term, predictable infrastructure cash flows, underpinning our medium-term guidance and creating valuable future options,” Chris added.

Tyler Reeder, President and Managing Partner, ECP, said that they were delighted to be partnering with ECP, a highly experienced investor in energy infrastructure around the world. We look forward to working with them and Grain LNG’s management team to deliver on the full potential of this unique asset for customers and the country, Reeder said.

As one of the largest private owners of natural gas generation and infrastructure assets in the US, ECP has long understood that natural gas is indispensable to keeping grids resilient and advancing the transition to a lower-carbon future.

With the emergence of the U.S. as the global leader in low-cost LNG supply and the growing need for reliable natural gas supply across the UK and Europe, ECP believes Grain LNG will increasingly be relied upon as critical infrastructure to deliver dependable energy to local markets.