Centrica's gas deal may scupper Boris Johnson's plans for Thames Estuary airport

British Gas owner's £4.4bn LNG contract makes Mayor's plans 'unworkable'

London Mayor Boris Johnson’s ambitions to build an airport in the Thames Estuary has been dealt a major blow by Centrica’s £4.4bn deal
London Mayor Boris Johnson’s ambitions to build an airport in the Thames Estuary has been dealt a major blow by Centrica’s £4.4bn deal

A £4.4bn gas deal has signalled "another nail in the coffin" for London mayor Boris Johnson's ambitions to build an airport in the Thames Estuary, according to union leaders.

British Gas-owner Centrica announced a four-and-a-half-year agreement yesterday to buy up to 3 million tonnes of liquefied natural gas from Qatargas. This builds on an earlier deal with the Gulf state-backed gas producer and could secure the energy needs of up 13 per cent, or 3 million, British households.

However, the gas will be taken to National Grid's LNG importation terminal on the Isle of Grain – the biggest by capacity in Europe – which Mr Johnson needs to demolish to make way for his four-runway airport.

The Isle of Grain site is the mayor's preferred of his three options for a new hub in the South-east, which also include the nearby "Boris Island" and expansion of Stansted, arguing that it would provide 4,200 long-haul flights a week to 205 destinations.

In a submission to the Government-appointed Airports Commission, chaired by Sir Howard Davies, Transport for London said that the LNG facility was "too tall and too close to the proposed airport site and would need to be relocated" to make way for the hub.

However, critics have poured scorn on such upheaval at a time when demand to use the terminal is so great – around 60 per cent of gas will be imported by 2020 – and yesterday's commitment of a vast amount of additional LNG has only made a relocation even less likely.

Mick Rix, the GMB national officer for the transport sector, told The Independent that the deal was "further proof" that Mr Johnson's plans were "ill thought out".

He added: "This is yet another nail in the coffin for Boris's idea – and nobody supports him. Aviation has to be the most secure industry given previous activities by armed groups [the 9/11 terrorist attacks], so I cannot see how the authorities would allow a hub airport to be built over an LNG facility." A second union source said the agreement showed that the Thames Estuary plan, which Mr Johnson has vociferously promoted over the construction of a third runway at Heathrow, was "ridiculous".

The Isle of Grain facility has grown substantially with an increase in imports of LNG over the past decade, while it is thought that National Grid could seek up to £3bn in compensation to move the terminal.

Centrica finance director Nick Luff said that the group would "absolutely not" have been able to agree the deal had the Isle of Grain not existed. The facility stores gas that has been chilled to minus 170 degrees and can be supplied as energy demands increase during the winter.

Mr Luff also said that the deal would help ease pressure on rising gas prices, which have been central to cost of living clashes between the major political parties ahead of the general election in 18 months.

Centrica chief executive Sam Laidlaw said earlier this week that he would waive his bonus this year after British Gas raised the average bill for 8.2 million customers by 9.2 per cent to £1,444 per household.

Mr Luff added: "The deal is a positive in that should prices be running away then this will stop them running away too much. If the prices are low, this will help keep the bills low."

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in