Qatargas, the world's largest LNG producer, signed a five-year sales and purchase agreement with Petronas LNG UK on Oct. 19, expanding a strategic import deal to Europe in the face of a looming global glut of gas supplies.
Petronas UK is a subsidiary of Petronas, Malaysia's national oil and gas company.
Under the agreement, Qatargas will deliver 1.1 million tonnes of LNG per year to the U.K.-based venture until Dec. 31, 2023, extending a current five-year contract that was due to expire on Dec. 31, 2018.
The LNG will be supplied from Qatargas 4, a joint venture between Qatar Petroleum and Royal Dutch Shell Plc (NYSE: RDS.A) and will be delivered to the Dragon LNG terminal at Milford Haven in the U.K.
Qatargas is looking to Britain and the Netherlands in an effort to weather an impending global gas glut through expanding import deals into Europe's most liquid markets, industry sources told Reuters in March.
Qatar must lock in buyers for its unsold supply just as new Australian and U.S. producers muscle into its prized Asian markets.
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