Centrica has announced that it is buying one of the biggest liquefied natural gas (LNG) facilities in the UK for £1.7billion.
Falling North Sea production, which is being wilfully accelerated by UK Government's drilling ban and 78% windfall tax, is being replaced more LNG shipments from countries like the United States, which carry up to four times more emissions.
LNG is expected to play an increasingly important role in the UK energy mix over the long term, Centrica said, projecting that it will meet 60% of the UK's gas demand by 2050 compared to 15% in 2024.
National Grid confirmed yesterday that it is selling Grain LNG to Centrica and private equity firm Energy Capital Partners to allow it to focus on its electricity and gas networks.
Chris O'Shea, Group Chief Executive at Centrica plc, said: "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.
"That's why we are so 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.
"We are 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.
Tyler Reeder, President and Managing Partner, ECP, 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 US as the global leader in low-cost LNG supply and the growing need for reliable natural gas supply across the UK and Europe, we believe Grain LNG will increasingly be relied upon as critical infrastructure to deliver dependable energy to local markets.
"We are thrilled to be partnering with Centrica, who bring a wealth of knowledge and experience in the UK energy markets, as we execute our joint vision to optimise this world class asset and set up Grain LNG for success for decades to come."
The deal - which needs to be approved by the government - will be paid for with £1.1billion of debt financing with Centrica investing £200million.
Centrica's share price rose 2.9% on the announcement.