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LNG bunker supplier Skangas has announced that it has signed a letter of intent (LoI) with National Grid Grain LNG (Grain LNG) to source LNG at Grain LNG's import terminal on the Isle of Grain, UK.

As a result of the deal, Skangas becomes the first small-scale LNG supplier to enter into such an agreement with a UK-based import terminal.

Skangas produces LNG at its liquefaction plant in Risavika, south-west Norway. However, with the small-scale market developing rapidly, the plant's annual production capacity of 300,000 tonnes has already been exceeded. The company therefore requires external LNG sources, and has entered into several contracts with similar large-scale European hubs to source LNG.

Through its latest deal with Grain LNG, Skangas aims to ensure that a reliable supply of LNG is available so that it is able to keep up with demand.

The Isle of Grain import terminal is set to become the UK's first to offer small-scale LNG (ssLNG) reloading facilities for ships.

Nicola Duffin, Senior Commercial Manager at Grain LNG, remarked: "We believe the best way to encourage growth in the market is to offer competitive alternatives which ensure security of supply for small-scale market participants. Grain LNG is excited to be at the forefront of developing this market in partnership with progressive companies such as Skangas."

The facility will include an extension to existing jetties to cater for break bulk marine LNG carriers up to 20,000 cubic metres - meeting the needs of Skangas's fleet of LNG carriers.

"Skangas appreciates the opportunity to source LNG from the Grain LNG terminal," remarked Dan Hramoff, Director of Business Development and Projects at Skangas. "This will improve supply to the small-scale markets, thus allowing to source LNG on more flexible and competitive terms. In the end, it will be reflected in improved offerings to our own LNG customers," he noted.

Skangas noted that by making LNG more readily available to the small-scale market from a variety of sources, the increased competition will create a more dynamic market, resulting in better, more cost-effective LNG supply for the market at large.