UK government approaches Qatar for ‘last resort’ gas deal
The UK government has approached Qatar for a long-term gas deal to shore up supplies amid soaring wholesale energy prices and growing fears of a winter fuel crisis, according to The Financial Times.
British ministers have been holding talks with the world’s largest producer of liquefied natural gas to reach an arrangement where Qatar would become a ‘supplier of last resort’.
This would ensure a stable source of LNG from Qatar even when global supplies are tight.
The country is pursuing the deal due to concerns over increased competition for LNG supplies with Asia.
Qatar has also rerouted four large tankers to the UK over the past two weeks.
The Financial Times reports that the shipments came after prime ministers Boris Johnson asked the Qatari emir, Sheikh Tamim bin Hamad al-Thani, for help.
Downing Street has insisted the UK has not requested any additional shipments from Qatar and supplies remain stable throughout the winter.
Natural gas prices have spiked this year following supply shortages and increased demand from reopening economies after COVID-19 lockdowns.
Meanwhile high demand for LNG in Asia has decreased supplies to Europe.
This has sent shockwaves through industries reliant on power, with the UK steel sector most recently pushing for financial relief.
Nearly half of the UK’s energy firms have ceased trading since the start of the year, with 19 collapsing in the past two months alone.
The most recent casualty of the market, CNG Energy, went bust last week.