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Monday, October 25, 2021

Qatar books 7.2m tonne LNG storage in 25-year UK deal


The Gulf country is set to export liquified natural gas (LNG) to the UK, where it will be kept in Europe’s largest storage facility.

Qatar Petroleum [QP] reserved a storage and delivery capacity at the UK’s LNG terminal for 25 years starting from mid-2025, the state-owned petroleum company announced on Tuesday.

The Doha-based company signed the agreement with Britain’s National Grid Grain, which entails the annual storage of 7.2 million tonnes of LNG.

“By entering into this agreement, we are reaffirming our commitment to the United Kingdom’s gas market,” said Saad Sherida Al-Kaabi, QP’s chief executive and Qatar’s energy minister.

According to Grain LNG, the terminal is currently able to store and deliver enough gas to meet at least 25% of UK gas demand. The rise in LNG imports contributed to lower wholesale gas prices in the UK.

“LNG imports play a critical role in making sure the UK has the gas it needs, when it needs it. This agreement ensures that Grain will continue to offer the UK a flexible and reliable supply of gas to complement the growth of intermittent renewable generation,” said Jon Butterworth, Managing Director of National Grid Ventures.

Grain LNG is the largest terminal in Europe and eighth largest in the world by tank capacity, with a span of 600 acres.

Read also: Qatar Petroleum to begin supplying ‘greener’ Ultra Low Sulphur Diesel

QP also has 67% shares at South Hook, another UK LNG terminal.

Qatar’s annual LNG production stood at 77 million tonnes in 2019 and is expected to produce 126 million by 2027, representing an increase of about 64%.

The anticipated rise in the country’s large production comes after drilling and appraisal work carried out in the North Field in the past year, with reserves that exceeded 1,760 trillion cubic feet.

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