Centrica signs five-year LNG deal with Qatargas

British Gas owner Centrica has signed a new five-year deal with Qatargas to buy up to two million tonnes of liquefied natural gas (LNG) each year starting in January 2019.

It will replace the existing contract between the two companies which will expire at the end of 2018.

“I am very pleased to extend our long-standing supply relationship with the world’s biggest LNG producer and our partner, Qatargas,” said Centrica chief executive Iain Conn.

“Centrica continues to develop its presence in the global market. The scale of our gas demand and our strong energy marketing and trading capabilities mean we are ideally-placed to work with LNG producers across the world, providing flexibility and a route to market at a time when secure market access is increasingly important.”

Qatargas chief executive Khalid Bin Khalifa Al-Thanim said: “Qatargas is pleased to lengthen our existing partnership with Centrica – a partnership which dates back to 2011. This new agreement reinforces Qatargas’ commitment to building a strong relationship with customers, and our position as the leading supplier of LNG to the United Kingdom.”

Centrica entered the current four-and-a-half-year contract in June 2014, and before that had a three-year contract with Qatargas starting in June 2011.

In August Mitie Energy called for the UK to secure its gas supplies by gaining “greater access” to an “abundance” of storage in Europe. The consultancy firm said the case for building more storage in the UK was in part being undermined by a global glut of LNG from places such as Qatar and the underutilisation of Britain’s import facilities.