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Wed 19 Oct 2016 01:57 PM

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Qatargas inks LNG supply deal with UK unit of Petronas

World's largest LNG producer signs five-year agreement to deliver 1.1m tonnes of LNG per year

Qatargas inks LNG supply deal with UK unit of Petronas
A night view of the Petronas Petroleum Industry Complex in Kerteh, Terengganu, Malaysia, on Saturday, June 23, 2007. Malaysia, the worlds third-biggest exporter of liquefied natural gas, is losing market share to Qatar and Australia after domestic gas production fell for the first time in six years, stalling expansion plans. Photographer:Goh Seng Chong/Bloomberg News

Qatargas, the world's largest LNG producer, said on Wednesday it has signed a five-year sales and purchase agreement with Petronas LNG UK.

Qatargas will deliver 1.1 million tonnes of LNG per year to the UK-based venture until December 31 2023, extending a current contract that was due to expire on December 31 2018, it said in a statement.

The LNG will be supplied from Qatargas 4, a joint venture between Qatar Petroleum and Shell and will be delivered to Dragon LNG terminal at Milford Haven in the United Kingdom.

Petronas UK is a subsidiary of Petronas, the national oil and gas company of Malaysia.

Saad Sherida Al-Kaabi, chairman of Qatargas, said: “This extension will enhance Qatar’s leading position in the LNG market, and will further reinforce Qatargas’ commitment to meeting the needs of its customers of this clean energy source.

“Most importantly, this agreement is a testament to our proven ability to safely and reliably deliver LNG to customers not only in the United Kingdom but all over the world.”

Qatargas is looking to Britain and the Netherlands in an effort to weather an impending global gas glut through expanding import deals into Europe's most liquid markets, industry sources told Reuters in March.

Qatar must lock in buyers for its unsold supply just as new Australian and US producers muscle into its prized Asian markets.

* With Reuters

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