LNG-breathing Dragon flaps its wings in welcome as Shell’s new Dutch partner comes aboard UK gas project

With the ink now dry, the deal with the London-based infrastructure manager Ancala has been wrapped up, enabling the Netherlands-headquartered energy infrastructure player VTTI – owned by Vitol, IFM Investors, and ADNOC – to join the UK’s energy giant Shell in Dragon LNG Group, also known as Dragon LNG, the owner of a major import terminal for the supply of liquefied natural gas (LNG) to the United Kingdom market.

The Dutch firm set the stage to get its hands on the London-based infrastructure manager’s entire shareholding totaling 50% of Dragon LNG, where ownership was split equally between Shell (50%) and Ancala (50%). VTTI has closed this acquisition, which allowed it to enter into one of the three LNG terminals in the UK. This regasification terminal recently underwent a three-fold increase in LNG volumes.

Guy Moeyens, CEO of VTTI, commented: “Facilitating the import and distribution of LNG aligns with VTTI’s strategy to support the global energy transition and ensure security of supply. As an energy infrastructure company with extensive storage industry experience, we are well-positioned to develop, operate, and manage LNG terminals worldwide.

“We are looking forward to work together with Shell to ensure that Dragon LNG continues to operate in a safe and reliable manner while working towards accelerating its decarbonisation and growth path.”

Located near Milford Haven in Wales, Dragon LNG’s regasification terminal is one of three LNG terminals in Britain and consists of LNG receiving, storage, reliquefication, regasification, and send-out facilities, which can achieve maximum gas send out to the UK national transmission system of up to 9 billion cubic meters, supplying approximately 10% of the country’s annual gas demand.

In a bid to decarbonize Scope 2 emissions at the LNG terminal, Dragon Energy, a fully owned subsidiary of Dragon LNG Group, has also developed a solar farm at the facility and is developing additional renewable power projects at the site, including the recently announced Milford Haven CO₂ project, which will be done in collaboration with RWE Pembroke Net Zero Centre, exploring carbon capture, pipeline transfer, liquefaction, temporary storage, and ship loading to enable CO₂ shipping from a new Dragon jetty via non-pipeline transport to sequestration sites around the UK.

Simon Ames, Managing Director of Dragon LNG, remarked: “We are excited to welcome VTTI to Dragon LNG and Dragon Energy as a key shareholder alongside Shell. This partnership will strongly support our ongoing commitment to operational excellence and sustainable growth. By integrating VTTI’s expertise in energy infrastructure, we can look to further enhance the safety, reliability, and environmental performance of our terminal, whilst ensuring our customers continue to provide secure and flexible energy supply into the UK.” 

The latest acquisition is expected to help VTTI come closer to its aim of accelerating growth, with 50% of its earnings coming from transitional and sustainable energy sources by 2028. Dragon LNG is the firm’s second announced investment into LNG regasification terminals, following the announcement of the intention to acquire a 70% equity stake in Adriatic LNG in Italy, which is expected to be closed by the end of 2024.

As part of its Strategy 2028, the Dutch player is building on its foundation as an energy storage and service terminal operator at ports it identifies as key ones around the world while investing in and developing additional energy infrastructure needed for the energy transition, including LNG regasification terminals, renewable natural gas (RNG), and waste to value production facilities, biofuel storage, and ammonia and hydrogen infrastructure.