National Grid Plc, the owner of gas and power networks in Britain and the U.S., is in talks to sell land next to its U.K. terminal for liquefied natural gas in order to invest in its energy networks.

``National Grid is investigating the potential sale of its land on the Isle of Grain, Kent,'' spokeswoman Gemma Stokes said in an e-mail yesterday. The area for development covers about 425 acres (172 hectares), she said. Stokes declined to comment on the site's value.

Chief Executive Officer Steve Holliday decided in January against selling National Grid's property unit because of a slowdown in the U.K. real-estate market. The company said at the time it would continue to sell former industrial and commercial properties that have been abandoned on a site-by-site basis.

Holliday told investors in London on Oct. 7 he's planning to raise investment in the company's energy networks to 3 billion pounds ($5.2 billion) a year through 2012, to boost regulated returns. He said in an interview the same day he isn't planning acquisitions and is confident in National Grid's ability to fund the spending through the debt markets.

The company has ``one very large piece of land by the Isle of Grain that people are looking at buying,'' Holliday said in the interview. ``There's certainly talk about replacing the power station there with a new power station and there are conversations around an expansion of a container port, so land is very valuable.''

Double Operations

National Grid won approval for the $7.3 billion takeover of KeySpan Corp. in August 2007, doubling operations in the U.S. to become the country's second-biggest energy distributor by customer numbers. It sold wireless networks and an Australian power cable to fund the expansion and completed a 2.3 billion- pound repurchase of shares. Now the company wants to raise its ownership by U.S. investors from the current 16 percent.

Investing 3 billion pounds a year is equivalent to buying a utility the size of KeySpan every two years, Holliday said. That means any purchase by the company would need to be ``an opportunity that you just cannot pass by,'' he said. ``I don't see any opportunities in the short term. It's not where my focus or the rest of the team's focus is.''

Holliday said that if Germany's transmission networks are made available for sale as part of a European program to separate network operations from production and supply, he ``will take a look at it, but it's going to have to pass some pretty high hurdles.''

`Safe Haven'

The company is confident that it can finance growth. ``We can last out until March 2010 without reducing our capital program and just drawing on our bank lines,'' Holliday said. ``We have no intention of drawing those bank lines,'' he added.

``Increasing confidence over regulatory returns, financing and dividend growth should demonstrate that the shares could be a relative safe haven'' in the current market environment, Dresdner Kleinwort Group analyst Martin Brough said in an Oct. 14 note. He recommends buying the company's shares.

National Grid added 27 pence, or 4.2 percent, to 663.50 pence as of 8:23 a.m. in London trading today. The stock has lost 20 percent so far this year.

Investors shouldn't just buy the shares because of the market turmoil, Holliday said. ``They should invest in National Grid in any market because it is a low-risk investment that is growing through huge organic investment and that is locking in an increase in dividend.''

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