Hong Kong’s CK Infrastructure closes in on acquiring UK’s Grain LNG terminal

Hong Kong-based CK Infrastructure is the frontrunner to acquire Grain LNG import terminal from the UK’s National Grid, sources with knowledge on the subject told Bloomberg on August 7.

Final terms of the deal are under negotiation with the bidder offering the UK utility GBP 2bn ($2.7bn) and an agreement could be reached in the coming days, however sources cautioned that the prospective deal is still far from a certainty.

CK Infrastructure emerged as the leading bidder edging out a consortium led by Ontario Municipal Employees Retirement System, a Canadian pension fund. More than 20 bidders had expressed interest in acquiring the UK’s largest gas import terminal.

For National Grid, a deal would help the electricity and gas utility finance its major investment program to decarbonize the country’s power grid.

National Grid has ambitious plans to allocate over GBP 30bn ($40.4bn) in the coming five years on expansion as well as upgrades as London seeks to electrify its energy systems and increase the share of renewable energy in its energy mix.

National Grid’s divestment from Grain LNG has been a long journey, with the utility first announcing its intentions in May 2024 as part of company streamlining efforts.

However, the announcement sparked concerns in the UK with trade union UNISION warning that the sale would put UK energy security at risk and calling for a political decision on the matter. 

Grain LNG is located on Grain Island in southeast England. The facility boasts a regasification capacity of 15mn tonnes per year (tpy).

Situated 60 km east of London, the import terminal’s current primary capacity is fully contracted to BP, Centrica, Sonatrach, TotalEnergies, Uniper, and Pavilion.

US LNG heavyweight Venture Global has also secured 3mn tpy of storage and regasification capacity for 16 years beginning in 2029.

For CK Infrastructure, closing the deal would shore-up its assets in the UK. The group completed a second listing on the London Stock Exchange in 2024 and also holds investments in Phoenix Energy, Northern Gas Networks, UK Power Networks, and Northumbrian Water.