RasGas in billion dollar talks with UK supplier
Centrica looks to spend US$4.9 billion war chest on cheap gas supplies
By Martin Morris
Centrica is reported to be in advanced talks with Qatar's RasGas, one of the world's largest liquid gas producers, to agree a multi-billion-pound, long-term supply deal.
The British Gas owner has a US$4.9 billon war chest and is desperate to snap up gas supply sources while prices remain relatively low, the UK's Mail on Sunday reported.
The paper added that it understood the company, which has agreed smaller deals with RasGas, wants to secure reliable supplies of liquefied natural gas into its giant Isle of Grain terminal in Kent, UK, where it has storage capacity.
A signed deal is believed to be a few months off, but talks are said to be going well. Centrica is seeking similar deals with producers in Nigeria and Algeria, and has identified potential supply deals in the Norwegian sector of the North Sea.
Last month, Norwegian oil and gas group StatoilHydro confirmed it had signed a short-term deal with RasGas for deliveries of liquefied natural gas to its Cove Point terminal in the US.
"The number of LNG cargoes actually delivered to Statoil at Cove Point will depend on such factors as the competitiveness of US gas prices," spokeswoman Rannveig Stangeland said.
Despite that particular deal the LNG market has been hit by the global recession, just as a raft of new production projects are expected to come on-stream.