Centrica welcomes opening of UK gas link to Qatar

Centrica today welcomed the opening of the Qatar partnership's South Hook liquefied natural gas (LNG) terminal, and has outlined the important role Qatar will play in supplying LNG to the UK.

The South Hook terminal in Milford Haven is the first project to involve Qatar in the UK gas industry and follows the opening of the Qatargas 2 LNG gasification plant in Qatar last month. Gas from Qatargas 2 will be unloaded at South Hook and go directly into the UK's gas network.

Sam Laidlaw, Centrica Chief Executive, said: "The UK is now the world's fastest growing market for imported gas and now has a direct link with Qatar, the world's biggest LNG exporter.  This significant milestone in bringing supplying and consuming nations together will be a huge boost to UK energy security.

"The UK and Centrica require a mixed portfolio of energy sources. LNG gives the UK flexible access to major global gas reserves bypassing the need for transit through European markets. Qatar is hugely important in energy terms and a major piece in a complex ‘security of supply jigsaw'. Our relationship with Qatar is of particular importance and we look forward to building much closer ties over the coming years."

Until 2004 the UK was entirely self-sufficient in gas, relying on its production from fields in the UK Continental Shelf.  However, with indigenous supplies now depleting rapidly and with an annual demand of about 100 billion cubic metres (bcm) of gas the UK will need to import up to 50 per cent of its gas needs in 2009, rising to around 75 per cent by 2015. By 2017 it is expected that LNG will grow to around 28 per cent of UK total supply.

This year Centrica has imported 201 million therms of LNG into the UK through the Isle of Grain LNG terminal. Centrica also has the rights to a further 2.4bcm of annual capacity under a 19-year contract at the third phase of the Isle of Grain, due to be available from 2010/11. This will mean almost 30 per cent of the terminal's total capacity will be available to supply British Gas customers from that time and overall the Isle of Grain will then be capable of supplying 20 per cent of UK annual demand.