Centrica has announced that it has renewed a supply deal of US$7bn for four and a half years with Qatargas 4 starting June 2014 for the purchase of up to 8.4mn cubic metres of LNG per year
The sales and purchase agreement (SPA) was signed recently by Mohammed bin Saleh Al Sada, chairman of the board of directors of Qatargas, and Sam Laidlaw, chief executive of Centrica.
The LNG will be produced at Qatargas 4, a joint venture between Qatar Petroleum and Shell, and delivered to the Isle of Grain LNG Terminal in the UK.
Al Sada said, “We are pleased with this agreement as it further strengthens the existing relationship between Qatargas, the largest LNG producer in the world and Centrica, the largest gas supplier to the domestic gas market in the UK.”
Laidlaw added that it was vital that the UK has a diverse range of sources of supply to meet its energy requirements and in a competitive international market, contracts like this underpinned the country’s access to global LNG supplies for the benefit of British customers.
Qatargas 4 and Centrica had earlier signed a master sales and purchase agreement (MSPA) in 2010 and in 2011 under the MSPA, the Isle of Grain LNG Terminal received a Q-Max LNG vessel for the first time. Subsequently, the first SPA between Qatargas 4 and Centrica was signed in 2011 to supply up to 6.7mn cubic metres per annum for duration of three years.
Centrica said, “The previous contract signed with Qatargas 4 comes to an end in June 2014. 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 to December 2018.”
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