Centrica in £2bn deal with Qataris
British gas-owner Centrica has signed a £2bn contract to import liquefied natural gas from Qatar, the Arab emirate which boasts the world's third-largest gas reserves after Iran and Russia.
Supply deal: Centrica will import gas from Qatar
The three-year deal to buy 2.4m tonnes annually will provide enough gas to meet 10% of Britain's household demand, supplying 2.5m homes.
It was announced during a trade visit to Qatar by Prime Minister David Cameron and a clutch of business leaders, including Centrica chief executive Sam Laidlaw.
While they were over there, Qatar's prime minister Sheikh Hamad bin Jassim Al Thani also expressed an interest in investing in the part-nationalised Royal Bank of Scotland and Lloyds Banking Group.
The UK government needs to eventually offload its 83% stake in RBS and 41% holding in Lloyds and Qatar may have made early overtures to Cameron.
News of the supply deal with Qatargas came as Centrica prepared to today unveil record profits for its British Gas arm, which supplies 10m UK homes with energy.
Increasing demand for gas and declining North Sea production means the UK is steadily importing more as it seeks to diversify its energy supply. Around 83% of total gas needs will come from imports by 2025.
LNG is natural gas that is super-cooled into a liquid for transport by ships. It will be turned back into gas once brought onshore in Kent before being piped into homes and businesses.
Laidlaw said he hoped the deal would be the start of a long relationship. 'The UK is the largest gas consumer in Europe and one of the fastest growing markets for gas imports,' he added.
Centrica (down 3.6p at 335.1p) shrugged off concerns that rising tensions in the Middle East could affect the deal's future, saying it was watching developments 'very closely'. Oil prices have surged amid fears about security of supply as upheaval in the region intensifies.
Mark Hanafin, managing director of Centrica Energy, said: 'Qatar has a stable history, is seen as progressive and has a record of investing in the UK.'
The deal with Centrica is not the first time Qatar has been linked to British business. Last year, the emirate's royal family bought iconic London department store Harrods from Mohammed al Fayed for around £1.5bn.
And the Qatar Investment Authority has stakes in the London Stock Exchange, Barclays bank, Sainsbury's and Canary Wharf-owner Songbird Estates.
Sheikh Hamad also has a personal stake in the upmarket One Hyde Park apartment block developed by the Candy brothers.
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