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Last Updated: Wednesday, 11 August 2004, 10:00 GMT 11:00 UK
West Wales base for 4bn gas deal
Milford Haven
The council hopes the LNG importation will make Milford Haven the UK's third busiest port
A new gas terminal in west Wales is at the centre of a major deal to supply liquefied natural gas (LNG) to the UK.

The 15-year supply deal, announced by British Gas owner Centrica, could be worth around 4bn.

Malaysian company Petronas will import gas from around the world to a new terminal at Milford Haven for UK customers.

The contract is due to start in 2007-8 and will deliver LNG, which is gas that has been cooled so it can be carried by tanker instead of pipelines

Work on building the 250 million terminal is expected to start in the autumn, with up to 700 construction jobs and 30 permanent jobs being created.

Oil giant Exxon Mobil has already announced plans to build a similar LNG plant on the old Esso refinery site nearby.

Friends of the Earth Cymru campaigner, Neil Crumpton, said LNG was about 20 to 30% less efficient compared to North Sea gas.
Today's announcement by Centrica is a further boost for the economy of West Wales
Andrew Davies

This was because, he said, the liquefying process was very energy intensive. It has to be liquefied to transport it from the Middle East.

Pembrokeshire Council has said it hopes the two LNG projects will make Milford Haven one of the busiest ports in the UK.

The Centrica contract is due to start between October 2007 and 2008.

In all over 45 billion cubic metres (bcm) of gas will be delivered, the company says.

Volumes will increase during the contract, which could eventually reach a value of around 4bn, with an average of three billion cubic metres of gas imported a year.

Making the announcement on Wednesday, Sir Roy Gardner, Centrica's chief executive, said: "We are the first UK company to sign a contract of such size and duration for this market, which demonstrates our commitment to secure gas for our British Gas customers from a diverse range of sources in the years ahead."

The LNG will be delivered by Petronas, the state oil and gas company of Malaysia, to Milford Haven.

The terminal will be operated by Dragon LNG, a consortium involving the BG Group, Petronas and Dutch-owned Petroplus.

Site owners Petroplus had already been given planning permission from Pembrokeshire council to build the terminal, which will be on the site of its existing oil storage depot.

The company took over the former Gulf Oil site at Waterston more than six years ago.

Andrew Davies, Minister for Economic Development and Transport at the Welsh assembly, welcomed the announcement on Wednesday.

"Together with the First Minister, I have met several times with both Exxon and Petronas, to provide support and advice on these major developments," he said.

"Today's announcement by Centrica is a further boost for the economy of West Wales, and positions Pembrokeshire as the energy capital for both fossil fuels and renewable energies," he added.

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