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UK Centrica Signs $3.25 Billion LNG Deal With Qatar

Qatar : 23 February 2011

Centrica, the largest energy supplier in the UK, has signed a £2 billion ($3.25 billion) deal with Qatar for the delivery of LNG (liquefied natural gas) to Britain, as that nation looks to supplement decreasing North Sea reserves.

This is a three year long contract between Centrica and Qatar Liquefied Gas Co. and involves the delivery of 2.4 million metric tonnes of gas annually. This amount represents around 10 percent of the annual (residential) demand in the UK, according to a statement from the Windsor-based energy firm.

Britain has become the largest gas consumer in Europe and is rapidly becoming the major global gas importer as the North Sea reserves dwindle and more seaborne imports are being booked to come in from Africa, the Caribbean and the Middle East. The UK is looking for contracted supplies that cover multiple years in order to shield domestic customers from volatile prices.

Sam Laidlaw, Centrica’s CEO, stated that LNG is a bridge for the nation to the larger gas reserves across the globe and a vital part of the long-term plan for energy security in Britain.

Qatar is in control of around 15 percent of the proven global gas reserves and ranks third in the world behind Russia (first) and Iran (second). As of 2010, 15 percent of the natural gas in Britain was supplied by Qatar, according to a statement by Centrica. It is estimated that by 2025 LNG could make up almost 50 percent of the UK’s total supplies.

British PM David Cameron stated that this deal is a vital step to secure energy for Britain. He spoke to the media recently in Doha, Qatar saying that the deal is also good for consumers in the UK.

The company, known as QatarGas, is a joint venture between Qatar Petroleum (government-run), ConocoPhillips, Exxon Mobil, Royal Dutch Shell  and Total.

Centrica stated that the initial delivery for this contract is slated for June and will be directed to the LNG terminal at the Isle of Grain in the National Grid.

Andrew Reid, Staff Writer, Gulf Jobs Market News
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