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Gas terminal plans resurrected

Power company Centrica is planning to take a stake in a project to revive a liquefied natural gas terminal to meet the UK's rising demand for imports.
The British Gas owner has joined Calor Gas and LNG Japan in the Canvey LNG project at Canvey Island in Essex.

Centrica and its partners plan to return the liquefied petroleum

gas terminal at Canvey to its former use as an LNG receiving terminal.

If it receives planning consent and is built, Centrica would hold a 20 per cent share in the development, as well as rights to use it to deliver LNG from overseas to British Gas customers.

Centrica said it would save money by converting and using the existing terminal, rather than building a new one on a Greenfield site.

The company's share of the pre-development costs of the project would be about £1 million.

The proposal includes construction of two LNG storage tanks, reinforcement of the existing jetty and a new connection to the national gas transmission system.

Depending on planning approval, a decision to build the plant is expected by the end of next year, with completion around the end of the decade.

The plant delivered the UK's first LNG supplies in 1964 before being decommissioned in 1992.

It will be able to handle 5.4 billion cubic metres of LNG and to

meet 5 per cent of the UK's annual gas demand as the country's dependency on imports increases, Centrica said. LNG could account for a quarter of the UK's gas by 2010.

The Canvey development is one of a small number of proposed schemes in the UK.

In March, Centrica signed a 20-year deal to buy regasification capacity at the new Isle of Grain terminal in Kent, providing access to a potential annual volume of 3.4 billion cubic metres of LNG from late 2008.

Centrica's chief executive Sir Roy Gardner said: 'This agreement gives Centrica the opportunity to participate in one of the few planned or proposed regasification projects in the UK.'

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