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Friday, December 3, 2021

UK asks Qatar to become gas ‘supplier of last resort’ amid energy crisis

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This comes as the UK continues to grapple with an energy crisis as worldwide prices jump and exports from Russia reduce.

The UK has requested for Qatar to become its “last resort supplier” of gas as the nation grapples with an ongoing energy crisis.

British Prime Minister Boris Johnson approached Qatar’s Amir Sheikh Tamim bin Hamad Al-Thani to request assistance for his country’s energy sector during a meeting at the UN General Assembly in September. Since then, talks have taken place between government ministers from both nations, including UK Foreign Secretary Liz Truss.

Such a deal would mean the gas-rich Gulf state would enter a long-term arrangement to ensure a stable and continuous supply of liquefied natural gas (LNG) to the UK.

This comes as Doha has also rerouted four large tankers to the UK over the last two weeks, according to a report by the Financial Times (FT).

According to sources, the British government has not paid for the shipments. Instead, Qatar will sell the gas into the UK market.

The first of the four shipments, the Al Aamriya, arrived at the South Hook LNG terminal in Wales on October 29. Qatar is a majority owner of this terminal.

The second tanker, Mozah, arrived on Wednesday. The last two tankers, Al Bahiya and Al Samriya, will be arriving in the coming days. The four tankers hold almost a third of the UK’s average monthly gas imports.

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“The Qataris have indicated a willingness to agree longer-term supply deals to deliver . . .  gas to the UK in an emergency scenario – a sort of ‘supplier of last resort’ arrangement,” said a person familiar with the talks to the FT.

However, Downing Street downplayed such requests, noting the UK had not “requested or secured any additional shipments from the Qatari government” and claimed energy supply has remained secure, FT reported.

Despite this, a government spokesman confirmed the UK has held “regular discussions” with its “key energy partners around the world ahead of winter”.

The latest report comes as the UK’s energy sector continues to struggle amid soaring global energy costs and a reduction in LNG exports from Russia. This has driven a number of British suppliers out of business.

British business energy supplier CNG Energy Ltd is the latest to fall victim to the crisis, and 17 other energy suppliers in the country have gone out of business since September.

While the UK has vowed to seek net zero target by 2050, it remains heavily reliant on gas to provide heat and electricity.

A contributing factor to the drop in the number of LNG tankers coming to the UK is competition from Asia, as most LNG shipments, including those from Qatar, have been sent to the continent.

Qatar’s portfolio includes long-term fixed contracts with countries in Asia, but has fallen off the UK government’s list of main gas suppliers this year.


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