Friday, May 10 16:43:51
Exxon Mobil and Qatar Petroleum announced an agreement yesterday to ship liquefied natural gas to Britain from their proposed export plant in the United States, offering another supply stream to the island nation as domestic output dwindles.
Under the deal, the companies would send up to 15.6 million tonnes of LNG each year to their South Hook terminal in Wales from the Golden Pass plant in Texas, pending U.S. government approval to build the plant and export LNG.
The announcement comes at the end of a torrid winter in Britain which saw natural gas stocks fall to dangerously low levels, causing major price spikes and calls for a more robust supply system.
Britain has a number of LNG import terminals, but a lack of firm, long term supply deals makes it vulnerable to sudden shortages when shippers in the Middle East divert cargoes to higher paying markets in Asia, especially in winter.
The South Hook terminal was underused during winter despite higher demand.
Meanwhile, a drilling boom in the United States has pushed production to record highs and pulled prices to decade lows, prompting a string of export project proposals. Golden Pass was originally built in 2010 to import LNG, but like a number of other terminals is now filing to export after sitting idle for nearly three years.
Export approval relies largely on the outcome of a political debate in the United States about exporting its abundant resources overseas that opponents say would push fuel costs higher at home. ( C) Reuters