UK: Planning Act Blog 174: Focus On Liquefied Natural Gas (LNG) Facilities

Last Updated: 12 October 2010
Article by Angus Walker

This is entry number 174, first published on 12 October 2010, of a blog on the implementation of the Planning Act 2008. Click here for a link to the whole blog. If you would like to be notified when the blog is updated, with links sent by email, click here.

Today's entry considers one of the types of project covered by the Planning Act - LNG facilities.

Liquefied Natural Gas (LNG) facilities are one of the sixteen types of project that if they are above a specified size, must be authorised using the regime under the Planning Act 2008. The Act uses the oxymoron 'liquid natural gas' - perhaps because liquefy is one of the most commonly misspelt words in English.

LNG is natural gas (mainly methane) that has been cooled to -162 degrees C so that it is in liquid form. This makes it much easier to transport by sea, since it is about 1/600th of the volume of natural gas at ordinary temperatures, although obviously the vessel needs to have serious refrigeration on board. Thus where a country needs more gas than it produces and the capacity of any international pipelines is insufficient, this is an alternative method of supplyihg gas. Coastal facilities need to be provided to accept LNG vessels, store and 'regasify' the LNG and inject it into the gas transmission system.

The UK is one such country - its own reserves in the North Sea have been declining and it became a net gas importer at the end of 2004. There are international pipelines from Balgzand in the Netherlands and Zeebrugge in Belgium to Bacton in Norfolk (the BBL Pipeline and the Interconnector, respectively) and from Myhamna in Norway to Easington in Humberside (the Langeled Pipeline), allowing the import of gas to the UK. Dmoestic production plus the capacities of these pipelines will not be sufficient on their own to meet the UK's future gas needs.

Facilities in the UK

Accordingly, LNG facilities have been built in the UK over the last five years. The first, Grain LNG in north Kent, has been operational since July 2005. A second phase came into operation last year and a third and final phase is to be completed imminently. This will bring the facility's capacity up to 57 million cubic metres per day (mcm/d). By way of comparison, the day of highest demand for gas in the UK was 17 December 2007, when 419 mcm were required. Phase I is operated by BP and Algerian company Sonatrach, Phase II by Centrica, Sonatrach and French company GDF, and Phase III will be operated by E.on, Centrica and Spanish company Iberdrola.

The second UK facility to open was at Teesport on Teesside in February 2007. This facility is different from the others as the LNG is regasified while it is still on the import vessel rather than on land. It is operated by US company Excelerate and has a capacity of 17 mcm/d.

Third and fourth are two facilities in Milford Haven in Pembrokeshire, known as Dragon and South Hook. These have been operating since September and October 2009 respectively. The first is operated by BP, Malaysian company Petronas and Dutch company 4Gas, and the second by Qatar Petroleum, Exxon Mobil and Total. They both have a capacity of 30 mcm/d. Note that the Planning Act does not extend to Wales for LNG facilities, however, and so any further permissions in Wales will continue to be made by ordinary planning applications there.

Policy and authorisation regime

Government policy on larger LNG facilities is contained in the draft National Policy Statement (NPS) on oil and gas infrastructure, EN-4. This doesn't have a great deal to say about LNG facilities, but mentions that when considering where to locate them, applicants should consider the availability of a deepwater jetty, sufficient land for development, proximity to dwellings, workplaces and other buildings used by the public, as well as proximity to the National (gas) Transmission System. Special factors that should be assessed and mitigated by the applicant and considered by the Infrastructure Planning Commission (IPC) are noise and vibration, landscape and visual, and dredging. For a link to EN-4, click here.

Discussion of LNG in the context of the Planning Act made it to a debate in the House of Lords on the energy NPSs in February this year. Lord Crickhowell expressed misgivings about the co-ordination between the port authority and the Health and safety Executive in dealing with the offshore/onshore interface for LNG imports at Milford Haven. The debate can be found here.

The energy national policy statements are expected to be reissued for further consultation this month; it will be interesting to see whether Lord Crickhowell's comments have had any effect.

The most likely next LNG terminal is proposed at Canvey Island in Essex. A planning application was originally refused in 2006 and appealed, but the appeal was withdrawn. If the application exceeds the Planning Act threshold of 43 mcm of storage or a flow rate of 4.5 mcm/d, then it will have to be made using the new regime. Canvey Island already deals in LPG, liquefied petroleum gas. This is not to be confused with LNG as it (a) is not methane but propane and butane, and (b) is generally liquefied by pressurising it rather than cooling it.

Previous entry 173: first IPC objection period starts for energy from waste project

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