IBERDROLA Delivers First LNG Cargo to National Grid*s UK Isle of Grain Terminal

IBERDROLA has delivered its first cargo of liquefied natural gas (LNG) in the United Kingdom under a long-term regasification contract signed in 2007 in the context of a capacity expansion at National Grid’s Isle of Grain plant.

The 145,000 m3 cargo was shipped by the Arctic Princess tanker from Snohvit’s liquefaction plant in Norway, which supplies IBERDROLA under a long-term contract signed with Statoil.

IBERDROLA will allocate part of the volume to meet supply requirements of its UK subsidiary ScottishPower, both for its combined cycle plants there which have a combined capacity of over 1,900 megawatts (MW), and also for its approximately two million gas customers.

Additional volumes will be for E.ON, which together with Centrica makes up the three companies awarded new capacity at the Isle of Grain.

The operation achieves the double purpose of leveraging its UK market presence through ScottishPower while enhancing its supply portfolio options in different markets, consistent with the Group’s international expansion strategy.

Since 2001, IBERDROLA has signed long-term contracts with several companies including Sonatrach, ENI, Nigeria LNG and Statoil (Snohvit).

The supply contracts cover a broad range of producing countries including Nigeria, Algeria, Norway, Egypt, Trinidad and Tobago and Qatar, thereby not only securing volumes but also offering flexibility in managing gas in the different markets in which the Company operates.

This strategy was fully reflected in a previously announced 15-year supply contract signed in August with Dong, taking effect next year and covering 1 bcm (billion cubic metres) of LNG from its Gate regasification facility in Rotterdam.

The contract, valued between €2-3 billion, was the first of its type signed by a Spanish company with a supplier outside Spain.

A strategically key contract

In May 2007, a month after the integration of ScottishPower, IBERDROLA signed a contract with National Grid for annual regasification capacity of up to 2.75 bcm in the UK from October 2010, following a tender for new capacity at the Isle of Grain.

The third phase, operational with this IBERDROLA shipment, includes a new jetty capable of unloading the world’s largest LNG supertankers (265,000 m3) and brings current storage capacity there to 1 million m3 of gas, equivalent to over two days of average demand in the UK.

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Source: IBERDROLA, November 1, 2010;