(Bloomberg) -- A project that will expand UK gas storage next year has been touted as a boon for Europe’s energy security. It’s also a substantial win for the small Gulf nation of Qatar.

Some 37 miles east of London on the Isle of Grain, a giant cylinder is being constructed at Europe’s largest liquefied natural gas terminal and will be ready to handle imports starting mid-2025. More capacity to stockpile fuel is welcome news for a region that is once again struggling with gas price volatility.

Qatar, meanwhile, has rushed to meet Europe’s booming demand for LNG, set in motion by curbed pipeline flows from Russia. The Middle Eastern nation is setting itself up to control about a quarter of all LNG by the end of the decade, and needs reliable avenues to sell its large fossil fuel volumes at a time when many of its trade partners are looking to decarbonize.

“For the Qataris, having easy, guaranteed access to the European market is important,” said Jason Feer, global head of business intelligence at consulting firm Poten & Partners. 

The new tank is part of the terminal expansion to accommodate a 25-year contract with state-owned QatarEnergy. The company in 2020 reserved capacity for as much as 7.2 million tons of LNG per year at the Grain terminal from 2025 to 2050. It will become the facility’s seventh customer from next year.

Reserving capacity means Qatar will be able to send volumes to the UK, store them and deliver to customers. Europe lacks fixed long-term supply contracts, meaning the region often has to make a last-minute call to lure fuel to meet demand. That’s when holding capacity for a customer such as QatarEnergy is useful, as it can direct cargoes there at the right moment.

The tank near the major energy-consuming region of London will be the terminal’s fifth of that size, and will allow the Grain LNG terminal to store and deliver enough gas to meet up to a third of current British demand.

“For Qatar it provides additional flexibility which can be commercially useful,” said Jonathan Stern, a distinguished research fellow at the Oxford Institute for Energy Studies. 

Across the Atlantic in Texas, QatarEnergy is finishing up construction at the Golden Pass LNG terminal together with its partner Exxon Mobil Corp. 

The project will be Qatar’s first LNG production facility outside of its borders, and proximity to Europe and the UK suggests some of its volumes may well end up at Grain LNG. It will be able to produce up to 18 million metric tons of LNG a year across three production trains, and is due to start output in 2025.

“Think of Golden Pass as a giant pipeline to the European gas market. Extra storage makes this become more of a reality,” said Ira Joseph, senior research associate at the Center on Global Energy Policy at Columbia University.

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