Centrica PLC (LSE:CNA) shares gained 2% after analysts pointed to the potential upside from its planned purchase, alongside Energy Capital Partners, of National Grid’s Isle of Grain LNG terminal for £1.66 billion.
The terminal earned £163 million in operating profit (before interest, tax, and other charges) in the year to March 2025, meaning Centrica would be paying roughly nine times that annual profit.
Citi notes Grain is adding a fourth gas storage tank, equal in size to each of the existing three, which should be ready by summer 2025 and boost earnings further.
In Citi’s own valuation, Grain is worth around £1.56 billion, or about 10 times its current annual profit.
Without factoring in the new tank, owning Grain outright could lift Centrica’s expected 2025 profit by around 10%.
The terminal should also help Centrica’s trading arm hit its £250–350 million annual profit goal, though Citi says its exact contribution will be hard to pin down.
The shares rose 3.2p to 165.3p.