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DUBAI, June 17 (Reuters) - State-owned Qatargas said on Saturday it had signed an agreement with Shell for the delivery of up to 1.1 million tonnes of liquefied natural gas (LNG) per year for five years.
The agreement will start in January 2019 and will be for the supply of LNG from Qatar Liquefied Gas Company Limited (4) (Qatargas 4), a joint venture between Qatar Petroleum which holds 70 percent and Shell with the remaining 30 percent.
The LNG will be delivered to either the Dragon LNG Terminal in Britain or the Gate LNG Terminal in the Netherlands, Qatargas said in a statement, which gave no value for the deal.
Qatar, the world’s biggest exporter of LNG, faces competition from Australian and U.S. producers. Supply deals into Europe offer a valuable option as Asia’s gas-consuming economies rein in new deals in light of a growing supply overhang.
The Shell agreement also comes as the worst rift in years among some of the most powerful states in the Arab world continues to simmer.
Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed their ties with Qatar this month, accusing it of supporting terrorism, a charge which Doha denies.
Qatargas has said its LNG supply to the world’s largest LNG importer Japan would not be affected by the economic, diplomatic and transport boycott. (Reporting by Maha El Dahan; Editing by Adrian Croft)