Posted on February 24, 2011

QatarGas Wednesday signed a heads of agreement to supply Liquefied Natural Gas (LNG) to Centrica of United Kingdom. Qatargas, the largest LNG producer in the world, will deliver 2.4 million tonnes per annum of LNG to the UK Isle of Grain Terminal for the next three years, the company said in a media statement today. Centrica, the parent company of British Gas, is the largest supplier of gas in the UK.

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

In 2010, Qatar supplied the UK with 15% of its total gas demand. By 2025 it will supply around 50% of UK's 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 Chief Executive Officer Khalid bin Khalifa Al Thani said, "This deal represents the establishment of a new relationship with Centrica and further underlines Qatargas commitment to the UK as one of our key gas markets, especially as it comes after Qatar's recent celebration of achieving a combined LNG production capacity of 77 million tonnes per annum (mtpa).

"This is an important milestone for Qatargas and we are delighted to be able to deliver LNG to additional UK customers. We are thankful for the guidance and direction from HE Minister of Energy and Industry Dr. Mohammed Saleh Al Sada that made this accomplishment possible."

Centrica Chief Executive Sam Laidlaw, accompanying Prime Minister David Cameron with other British CEOs on a trade delegation to Qatar, outlined the important role Qatar will play in producing liquefied natural gas for the UK, Centrica said in a media statement today.

"The UK is the largest gas consumer in Europe and one of the fastest growing markets for gas imports," said Laidlaw. "LNG provides the UK with a bridge to major global gas reserves.  This deal is of particular importance and we hope that this will be the start of a longer term working relationship.

"The relationship between Qatar, the world's leading LNG exporter, and the UK connects supplier and consumer nations. Securing gas supplies benefits our customers, underpins our business and provides an important component of the UK s long term energy security."

This deal will provide enough gas to meet the needs of around 2.5 million households in UK. It will also create a unique strategic relationship with the world's number one LNG exporter.

With increasing global competition from emerging economies for LNG, and declining North Sea production, this transaction secures important gas supplies for Centrica and the UK for the next three years.

Established in 1984, Qatargas pioneered the LNG industry in Qatar and now has a production capacity of 42 mtpa of LNG, from its seven trains. This makes it the world's largest LNG producer.