Qatargas has signed a five-year deal to supply 1.14 million tonnes a year (mtpa) of liquefied natural gas (LNG) to Petronas in Britain, the world's largest LNG exporter said on Tuesday.
Britain's falling domestic gas production has made it
heavily reliant on imports of LNG, especially fromQatar, over the last few
years, with rising competition for supplies raising fears over UK winter gas
supplies.
Under the deal, which comes into effect when UK gas demand
often peaks in January, Qatargas will deliver fuel to the Dragon LNG
Terminal, where state-run Malaysian company Petronas holds half the import
capacity.
Qatargas and its Qatargas 2 project partner
ExxonMobil are already the biggest gas suppliers to the nearby South Hook
import terminal at Milford Haven in Wales.
Now Petronas, which shares Dragon with BG Group, will be
supplied from the Qatargas 4 (Train 7) LNG export plant in Qatar,
a joint venture between Qatar Petroleum and Royal Dutch Shell.
"This is a ground-breaking agreement between two well
established and leading companies in the LNG sector, which further strengthens
the existing relationship between Qatargas and Petronas," Qatari
energy minister and Qatargas chairman, Mohammed Bin Saleh Al-Sada,
said in a statement.
Qatargas did not say when the first deliveries would be
made but Petronas is likely to get the highest prices for the gas it can pump
into the UK gas grid in the coldest winter months of January and February.
Petronas is one of the world's top LNG producers but ships
nearly all the super-cooled gas it produces on the island of Borneo to other
Asian markets where sales prices are typically higher than in Europe.
But rapidly rising demand at home has led the state giant to
build LNG import terminals in Malaysia andQatargas began
supplying Petronas' first LNG receiving terminal there in July.
Petronas' 50 percent stake in the Dragon import terminal
gives it the capacity to import around 2.7 mtpa of LNG into the
UK, Europe's biggest gas market.
Source: Reuters
