ExxonMobil and Qatar Petroleum sign LNG export deal

The deal opens a new source of potential gas supply for the UK.

New Statesman
An ExxonMobil oil refinery in the US. Photograph: Getty Images.

ExxonMobil and Qatar Petroleum International have signed an agreement to export liquefied natural gas (LNG) to the UK from their proposed $10bn export project at Golden Pass in Texas, reports the Financial Times.

The two companies also agreed to make capacity available at their joint venture company South Hook LNG Terminal at Milford Haven in Wales to ship cargoes of LNG from Golden Pass.

South Hook LNG Terminal, which could meet about 25 per cent of the UK’s gas demand, is a joint venture company of Qatar Petroleum International, ExxonMobil and Total.  

The companies are currently in discussions to chart out commercial details of the sales, which are subject to the approval of the US government.

The deal is part of a framework agreement between the two firms to ship and market the entire planned production from Golden Pass of 15.6m tonnes of LNG a year.

The shale boom and the slowdown in US natural gas prices has opened up potential opportunities for sales to Europe and Asia.

Golden Pass Products, formed by affiliates of Qatar Petroleum and ExxonMobil, has applied for permission in October 2012 to sell to countries that don’t have a trade deal with the US.

Over the last 10 years, the UK has become a large gas importer of LNG as its domestic production has declined. Britain’s BG Group and Centrica have already signed deals with Cheniere to buy LNG from Sabine Pass.