Qatar and UK's Centrica agree to invest in energy

AP News
Posted: Dec 05, 2011 7:53 AM
Qatar and UK's Centrica agree to invest in energy

Qatar's state oil company and British energy firm Centrica PLC agreed Monday to cooperate on pursuing energy investments, laying the groundwork for a further expansion of the wealthy Gulf state's international portfolio.

The memorandum of understanding between Centrica and Qatar Petroleum International, signed at an energy conference in Qatar's capital Doha, builds on a deal earlier this year that gave the British company access to a steady supply of Qatari gas.

Centrica is the parent company of British Gas, Britain's biggest household energy supplier. QPI is state-run Qatar Petroleum's international investment division.

They aim to invest in a range of new or existing oil and gas projects, including investments in liquefied natural gas, gas storage and gas-powered turbines, the companies said in a statement.

The agreement highlights QPI's desire to "to transform itself into a more active international player" in the global energy business, said Mohammed bin Saleh al-Sada, Qatar's minister of energy and industry and chairman of QPI's board.

The two companies didn't say how much they plan to spend or how soon their first joint deal could be completed.

Centrica CEO Sam Laidlaw said the partnership will seek investments that boost the long-term security of Britain's gas supply. "We will also explore joint opportunities to deploy capital and expertise in other markets to deliver growth and value for the group," he added.

Centrica announced the deal as energy industry leaders gathered for the World Petroleum Congress in Doha.

Qatar's ruler opened the conference earlier Monday by seeking to assure energy consumers that the unrest roiling the Arab world this year will not affect supplies of oil and natural gas.

Sheik Hamad bin Khalifa Al Thani said the events of the Arab Spring are a reminder of concerns about energy security in the Middle East. But the emir says the region's major energy producers will "exert every effort" to ensure energy supplies continue to flow, especially in time of crisis.

OPEC member Qatar holds the world's third largest natural gas reserves and is the biggest supplier of liquefied natural gas. LNG is a super-cooled form of the fuel condensed for transport on hulking supertankers.

In April, Qatar inked a deal with Centrica to supply it with up to 2.4 million tons of LNG annually over three years. That fuel is being shipped to Britain's Isle of Grain terminal from the Qatargas 4 project, a joint venture between Qatar Petroleum and Royal Dutch Shell PLC. The supply deal is worth 2 billion pounds ($3.13 billion) is covers about a tenth of Britain's annual residential gas needs, according to the companies.

On Sunday, Qatar Petroleum and Shell signed a tentative deal to jointly develop a large petrochemicals complex at a cost of about $6.5 billion. The plant, due to open in 2017, aims to turn Qatari gas into petrochemical products destined mainly for fast-growing Asian markets.

Qatar in recent years has used its vast energy wealth to snap up stakes in prominent European companies, including Barclays PLC, Credit Suisse Group, Volkswagen AG, and the London Stock Exchange.

It has increasingly turned its attention to the energy sector. Qatar Holding, the country's main investment vehicle, acquired more than 6 percent of Spanish power utility Iberdrola SA and 2 percent of power company Energias de Portugal earlier this year.