Centrica plc has acquired a 50% stake in the Isle of Grain liquefied natural gas (LNG) terminal as part of a £1.5 billion deal with Energy Capital Partners LLP (ECP) to purchase the facility from National Grid.

The transaction, which includes around £1.1 billion of new non-recourse project finance debt, will see Centrica invest approximately £200 million in equity.

Located on the Kent coast, Grain LNG is the UK's largest LNG terminal, providing critical import, export, regasification and rapid-response gas storage capacity to support national energy security. The facility has all of its capacity contracted until 2029, with more than 70% contracted until 2038 and over 50% until 2045, offering Centrica long-term, inflation-linked revenues.

-- Advertisement --

Centrica said the acquisition aligns with its strategy of investing in regulated and contracted infrastructure that supports the energy transition, while delivering predictable cash flows. Future development opportunities at the site could include a combined heat and power plant, bunkering facilities, and hydrogen and ammonia projects.

The company expects strong returns from the investment, with an unlevered internal rate of return (IRR) of around 9% and an equity IRR of more than 14%. Centrica’s share of annual EBITDA from the terminal is forecast at about £100 million, with average cash distributions of £20 million expected between 2026 and 2028.

ECP, part of Bridgepoint Group plc, is one of the largest private owners of natural gas generation and infrastructure assets in the United States, with extensive experience in grid reliability.