THE GOVERNMENT OF QATAR is investing millions of pounds in the expansion of the South Hook LNG terminal in Milford Haven, as the UK becomes more dependent on shipments of the liquefied fuel imported from abroad.
To accommodate around 25% more liquefied natural gas (LNG) imports from around the world, Qatar is upgrading to meet demand.
ExxonMobil is also making a significant investments to help increase the capacity of the South Hook.
Prices for fuel have skyrocketed as a result of the Russian invasion of Ukraine, prompting the United Kingdom and other parts of Europe to scramble for a deal securement with the world’s biggest LNG exporter, Qatar.
After the Cop27 climate change summit in Egypt, UK’s Prime Minister Rishi Sunak is expected to make a significant supply announcement with the United States, the Telegraph revealed.
The two major players in the global LNG industry are Qatar and the US.
The development of the $10 billion new Golden Pass terminal in the US, which is scheduled to open in 2024 and is anticipated to export to the UK, is being carried out in tandem with the investment in South Hook LNG by state-owned QatarEnergy and ExxonMobil.
In recent years, the UK has relied more and more on LNG, despite previously vilifying gas producers and pushing for an urgent end to fossil fuel production.
Approximately 17% of the UK’s gas demand was met internally in 2021, with its significance expected to increase as output from the ageing North Sea declines.
In the midst of an LNG market boom, Qatar and relevant partners completed the South Hook terminal in 2009. The terminal is one of three UK LNG facilities, with the other two in Kent and Wales, respectively.
The processing capacity of the station is 15.6 million tonnes of gas per year, or, according to the proprietors, nearly 20% of the UK’s annual gas demand. One of the largest in Europe, the terminal is already.
Analysts believe that Qatar’s plan to extend South Hook’s capacity to over 20 million tonnes of gas annually might cost hundreds of millions of pounds. Midway through 2025 is the anticipated completion date.
The US and Qatar are both already major LNG suppliers to the UK. 51 of the 175 shipments made to the UK between January and September originated from Qatar and 81 from the US, S&P Global Platts data detailed.
This year, the UK has received significantly more international cargoes than usual because it serves as a “gas bridge” to Europe, which is rushing to replace Russian supplies but does not yet have sufficient import infrastructure, the UK Government said.
A spokesperson for South Hook LNG in Milford Haven has confirmed there are plans to expand the facility by July 2025. “Our shareholders have taken a positive final investment decision to increase the Terminal’s re-delivery capacity to 812.5GWh/d.”
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