Centrica, the UK’s biggest energy supplier, agreed a 2-billion pound ($3.25bn) deal with Qatar to deliver liquefied natural gas to the UK as the country seeks to replace dwindling North Sea reserves.
The three-year contract with Qatar Liquefied Gas Co. to deliver 2.4 million metric tons of gas every year will meet about 10 percent of Britain’s annual residential demand, Windsor, England-based Centrica said in a statement on Wednesday.
Britain, Europe’s biggest gas consumer and the world’s fastest-growing major gas importer, is booking more seaborne imports of the fuel from the Middle East, Africa and the Caribbean as North Sea production declines. The country is seeking to contract supplies in multiyear deals to shield customers from price volatility.
“LNG provides the UK with a bridge to major global gas reserves” and is “an important component of the UK’s long- term energy security,” Centrica chief executive officer Sam Laidlaw said in the statement.
Qatar accounts for about 15 percent of proven world gas reserves, ranking third behind Russia and Iran. In 2010, 15 percent of the UK’s natural gas was supplied by Qatar, Centrica said in the statement. By 2025, LNG may account for as much as 50 percent of the country’s total supplies.
“This is an important step towards greater energy security for Britain,” British prime minister David Cameron said at a press conference on Wednesday in Doha, Qatar. “It’s also good for British consumers.”
QatarGas, as the company is known, is a venture between state-run Qatar Petroleum, Exxon Mobil Corp, ConocoPhillips, Total and Royal Dutch Shell.
The first delivery under the contract is due to take place in June and will go to National Grid’s Isle of Grain LNG terminal, Centrica said.
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