* Qatargas, Petronas eye expanded import deal into Dragon
* Falling Asian demand makes Europe valuable fallback option
* Value of import slots in NW Europe increasing
By Oleg Vukmanovic and Sarah McFarlane
MILAN/LONDON, March 22 (Reuters) - Qatargas is looking toBritain and the Netherlands in an effort to weather a loomingglobal glut of gas supplies by expanding import deals intoEurope's most liquid markets, industry sources said.
The world's biggest exporter of liquefied natural gas (LNG)must lock in buyers for its unsold supply just as new Australianand U.S. producers muscle into its prized Asian markets.
Slowing demand globally is only adding to producer woes,thrusting Europe's gas markets and dozens of under-used importterminals into the spotlight.
Qatargas has held talks with Petronas UK Ltd to gain greateraccess to the Dragon import terminal in Wales, as well as withUniper, formerly known as E.ON Global Commodities, for the Gateterminal in Rotterdam, two sources said.
Uniper declined to comment, while Qatargas and Petronas didnot respond to requests for comment.
Stefaan Adriaens, commercial manager at Gate, said he couldnot comment on whether Qatargas was interested in increasingcapacity at the terminal either via Uniper or directly.
"They see competition in Asia, so if they are looking forcapacity, then I presume it's to have an alternative to Asia,"he said.
Dong Energy
Unlike the last four years, import capacity at Gate andother northwest European terminals is becoming more valuable inresponse to the start of U.S. LNG exports.
"As more people are looking to Europe the capacity value hasincreased, whereas in other areas it's quite the contrary.Everybody was hoping for Asia demand but there demand was slowerso I think capacity value has decreased there," he said.
TALKS
In 2013, Qatargas signed a five-year deal to supply 1.14million tonnes a year (mtpa) to Petronas' half-share of theDragon terminal at Milford Haven.
Qatargas 4, a joint venture between Qatargas and Royal DutchShell, signed the deal with Petronas, followed by a five-yearagreement with E.ON Global Commodities to ship 1.5 mtpa to theGate terminal.
Both deals are flexible, according to the originalannouncements, meaning Qatar is not obliged to ship any LNG toBritain or the Netherlands and can divert cargoes at will.
At the time, companies with import rights at Dragon and Gatewere eager to drum up business and effectively gave Qatar freeoptions to make use of their capacity.
While Qatari deliveries to Dragon/Gate have been rare up tonow, weak Asian demand coupled with surging supply makes European increasingly attractive destination for cargoes.
Talks between Petronas and Qatargas over expanding theexisting deal at Dragon initially sought to double volumes andextend the duration of the deal by up to 10 years, one of thesources said.
A proposal was also made to commit Qatargas to delivering athird of the overall volume, he said.
At Gate, the choices boil down to exacting supply guaranteesfrom Qatargas or making it pay for optional import slots,sources said.
(Editing by Dale Hudson)
