Project Background

The gas market in the UK is experiencing fundamental changes as a result of declining United Kingdom Continental Shelf (UKCS) gas production. There is currently a rapidly increasing dependency on gas imports, as illustrated below. Predictions indicate that by 2014 over 50 percent of the UK’s gas requirements will be met through gas imports.

"NG 2010 EDITION OF THE TEN YEAR STATEMENT"

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Shortfall of flexible UKCS production means that alternative ways of maintaining flexibility must be investigated.

Port Meridian relies on supply of LNG. LNG is a natural gas, liquefied by reducing its temperature to minus 160 degrees.

A possible scenario for the future gas supply mix to the UK, including supplies from Norway, LNG and continental Europe is shown below. Currently LNG is about 20% of UK gas supply, but by 2025 about 50% is forecast to be supplied through LNG imports.

POSSIBLE SCENARIOS FOR UK ANNUAL GAS SUPPLY MIX (DTI, 2007)

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An increase to an LNG share of 50% will necessitate a significant increase in the LNG import facilities. Given the complexities and challenges involved in establishing new shore based LNG import harbours, the Port Meridian deep water port will help in supporting this level of LNG import.

As LNG is supplied from other sources than pipeline gas, an increased share of LNG will secure diversity of supply, which is an expressed UK goal.

Given the above, PMEL sees a clear need for Port Meridian, which once commissioned will help support the twin policy objectives of future security and diversity of energy supply.