DOHA: Qatargas, the world's largest LNG producer, signed a five-year sales and purchase agreement with Petronas LNG UK on Wednesday, expanding a strategic import deal to Europe in the face of a looming global glut of gas supplies.
Under the agreement Qatargas will deliver 1.1 million tonnes of liquefied natural gas (LNG) per year to the UK-based venture until Dec. 31 2023, extending a current five-year contract that was due to expire on Dec. 31 2018.
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 U.S. producers muscle into its prized Asian
markets.
Petronas UK is a subsidiary of Petronas, the national oil and gas company of Malaysia.
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.
Chairman of Qatargas Board of Directors Saad Sherida Al Kaabi said: "I am delighted to announce that by this agreement, Qatargas has extended its strong relationship with Petronas for many years into the future. 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."
Commenting on the new deal Chief Executive Officer of Qatargas Khalid bin Khalifa Al-Thani said "we are focused on building strong, long-term relationships with our customers, and reinforcing our reputation for being the most reliable and flexible supplier of LNG in the marketplace."
For his part Petronas Vice President of LNG Marketing and Trading Ahmad Adly Alias said that the extension of the agreement proves the value of a long-term LNG business relationship for both PETRONAS and Qatargas: "As a buyer and seller of LNG, Petronas looks forward to enhancing a mutually-beneficial partnership with Qatargas for value added opportunities amidst the current business environment."
