Qatargas firms up LNG agreement with UK's Centrica

Qatargas to deliver 2.4m tonnes/year of LNG to UK for 3 years

The Q-Max LNG vessel, Bu Samra at the Isle of Grain Terminal in the UK. Qatar supplied the UK with 15% of its total gas demand in 2010.
The Q-Max LNG vessel, Bu Samra at the Isle of Grain Terminal in the UK. Qatar supplied the UK with 15% of its total gas demand in 2010.

Qatargas has signed a Sales and Purchasing Agreement (SPA) to supply liquefied natural gas (LNG) to Centrica plc, the largest supplier of gas to customers in the UK, according the Qatar News Agency.

According to the agreement, Qatargas will deliver up to 2.4 million tonnes per annum of LNG from the Qatargas 4 project to the UK Isle of Grain Terminal for the next three years.

Qatar’s Minister of Energy and Industry HE Dr. Mohammed bin Saleh Al Sada, who is also chairman of Qatargas board of directors, said: "The State of Qatar is keen to support the UK's energy requirements and this agreement is yet another important milestone in our mutual energy relationship. We are committed to efficiently and reliably delivering LNG to the UK through the Isle of Grain Terminal."

A statement issued by Qatargas said the signing took place on Thursday by Qatargas chief executive officer, Sheikh Khalid bin Khalifa Al Thani and Centrica chief executive, Sam Laidlaw.

This latest signing follows the Heads of Agreement which was signed by Dr. Al Sada during the visit of the UK Prime Minister, David Cameron to Qatar on February 23 2011.

The UK is said to be the world's third largest gas consumer and one of the fastest growing markets for gas imports.

According to the news report, Qatar supplied the UK with 15% of its total gas demand last year, and by 2025, LNG will supply around 50% of UK gas needs. The current deal is likely to supply around 3% of the UK gas needs, and around 10% of UK residential gas demand.

Qatargas CEO Sheikh Khalid Bin Khalifa Al Thani said: "This significant deal heralds the start of a new working relationship between Qatargas and Centrica. It further underscores Qatargas’ commitment to the UK as one of our key gas markets. I am particularly happy that this signing coincides with the arrival of the first Q-Max LNG vessel, Bu Samra, at the Isle of Grain Terminal on Wednesday.

“Centrica chief executive, Sam Laidlaw, emphasised once again the importance of the deal announced by Centrica on 23 February, 2011: "The relationship between Qatar, the world's leading LNG exporter, and the UK, is increasingly important as we become increasingly dependent on imported gas to supply our UK customers. I am proud to be signing this deal today, which will provide enough LNG to meet 10% of UK residential demand over the next three years."

The Qatargas 4 project is a joint venture between wholly-owned affiliates of Qatar Petroleum (70%) and Royal Dutch Shell plc (30%). Qatargas 4, a 7.8 million tonnes-per-annum liquefaction plant, comprises upstream gas production facilities to produce approximately 1.4 billion cubic feet per day of natural gas, including an average of approximately 70,000 bbl/d of condensates and petroleum products from Qatar's North Field over the 25-year life of the project.

 

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