Incremental Capacity Project

Incremental Capacity Project

The South Hook LNG Terminal became fully operational in 2010, and has now provided over a decade of safe, reliable and secure energy to the UK. In that time a lot has changed. The global need for energy has continued to increase, and new sources of energy supplies have been found to meet this growing need, and also to replace older supply sources that have started to run out or no longer fit with society’s efforts to reduce emissions.

A range of energy sources and technologies will be necessary to meet the UK’s future energy requirements. Natural gas will continue to play a vital role in ensuring that our homes can be kept warm, electricity is available whenever it is needed, and industry has safe and reliable fuel supplies in order to make the products that we all depend upon.

As well as being an essential fuel in its own right, natural gas can also be reformed through an industrial process to create hydrogen.

For these reasons, in 2019 South Hook LNG Terminal’s majority shareholders – affiliates of Qatar Petroleum and ExxonMobil - committed to make further significant investments in natural gas by creating a new gas supply opportunity for the UK and wider markets. This includes building a brand new LNG production facility, and increasing the capability of South Hook LNG Terminal to bring gas to this country.

Golden Pass LNG Production Facility

The largest part of this investment commitment is to develop a brand new LNG production (liquefaction) plant in Texas, USA. This new facility – Golden Pass – will cost around US$10bn to convert from importing LNG into the USA, so it can export LNG from the USA. This development has been made possible due to significant new discoveries of natural gas resources in the USA, and advances in technology to help efficiently extract these. The US Government has already sanctioned the export of natural gas to countries including the UK through 2050. From Golden Pass, LNG can be shipped by sea to wherever it is needed most.

Additional Capacity at South Hook Terminal

The UK will have a continued need for natural gas supplies well into the future. 

In order to ensure that the UK continues to benefit from multiple sources of dependable supplies of natural gas, South Hook LNG Terminal’s capability is being reinforced to ensure that it can deliver natural gas at maximum capacity, and for extended periods of time. This will involve the reinforcement and installation of new equipment at the site.

Companies interested in performing work at South Hook LNG Terminal as part of this project, should follow the Procurement application process.

Additional Pipeline Capacity from Milford Haven

Once imported LNG has been warmed up and turned back into its gaseous form by South Hook LNG Terminal, this gas is then supplied into the national transmission system (NTS) – Great Britain’s high pressure gas pipeline system. This pipeline system is owned and operated by a separate company, National Grid Gas. From here it can be delivered wherever it is needed in the UK, or even re-exported to other countries including Ireland or mainland Europe.

When the original pipeline was built to connect Milford Haven to the NTS, it was built to the correct size for the expected Milford Haven gas deliveries at that time. The reinforcement of LNG processing capability at South Hook LNG Terminal means that there is a need to create additional pipeline capacity. South Hook LNG Terminal has been working closely with National Grid Gas to ensure that the requirement for this additional pipeline capacity is properly evaluated, and can be delivered in the most appropriate way. Absolute emphasis has been placed on seeking to reduce disruption to local communities, wildlife and environmentally sensitive areas of land.

It is currently anticipated that the Terminal can make available the Incremental Capacity from the mid-2020s. This schedule aligns with the expected availability of pipeline capacity. The reinforcement works at South Hook LNG Terminal and associated pipeline capacity works are wholly dependent on a favourable final investment decision.

National Grid Gas is responsible for planning and building the new pipeline capacity, and all enquiries relating to this should be directed toward National Grid