Centrica signs £2-bn gas deal with Qatar to secure LNG for the UK

British energy giant Centrica Plc today said that it has signed a £2 billion ($3.25 billion) three year deal with Qatargas to deliver 2.4 million tonnes per annum of liquefied natural gas (LNG).

The LNG that will be delivered at the UK Isle of Grain facility, will provide enough gas to meet approximately 10 per cent of UK annual residential gas demand, enough to meet the needs of around 2.5 million households, said Windsor, UK-based Centrica in a statement.

This deal will create a unique strategic relationship with the world's number one LNG exporter.  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 for the next three years.

Qatar, which has the world's third largest gas reserves, is set to become an increasingly important source of gas supply for the UK.  In 2010 Qatar supplied the UK with 15 per cent of its total gas demand. By 2025 LNG is expected to account for around 50 per cent of UK total supply.

Centrica CEO, Sam Laidlaw, said, "The UK is the largest gas consumer in Europe and one of the fastest growing markets for gas imports.  LNG provides the UK with a bridge to major global gas reserves.  This deal is of particular importance and we hope that this will be the start of a longer term working relationship.

"The relationship between Qatar, the world's leading LNG exporter, and the UK connects supplier and consumer nations. Securing gas supplies benefits our customers, underpins our business and provides an important component of the UK's long term energy security," he added.

Prime Minister David Cameron, said, "I welcome today's announcement by Centrica and Qatargas. This important agreement is good for Britain, good for our energy security, good for jobs, and good for economic growth."

Centrica, with interests in North America and Europe, was created with the de-merger of British Gas plc into Centrica plc and BG plc in 1997. Centrica is the largest gas supplier to domestic customers in UK and one of the major electricity suppliers operating as 'Scottish gas' and 'British gas' in Scotland and the rest of UK respectively.