* Supply deal begins in UK mid-winter peak demand period
* Qatargas to supply neighbouring terminals in Wales
DUBAI, Sept 17 (Reuters) - Qatargas has signed a five-yeardeal to supply 1.14 million tonnes a year (mtpa) of liquefiednatural gas (LNG) to Petronas in Britain, the world's largestLNG exporter said on Tuesday.
Britain's falling domestic gas production has made itheavily reliant on imports of LNG, especially from Qatar, overthe last few years, with rising competition for supplies raisingfears over UK winter gas supplies.
Under the deal, which comes into effect when UK gas demandoften peaks in January, Qatargas will deliver fuel to the DragonLNG Terminal, where state-run Malaysian company Petronas holds half the import capacity.
Qatargas and its Qatargas 2 project partner ExxonMobil are already the biggest gas suppliers to the nearbySouth Hook import terminal at Milford Haven in Wales.
Now Petronas, which shares Dragon with BG Group, willbe supplied from the Qatargas 4 (Train 7) LNG export plant inQatar, a joint venture between Qatar Petroleum and Royal DutchShell.
"This is a ground-breaking agreement between two wellestablished and leading companies in the LNG sector, whichfurther strengthens the existing relationship between Qatargasand Petronas," Qatari energy minister and Qatargas chairman,Mohammed Bin Saleh Al-Sada, said in a statement.
Qatargas did not say when the first deliveries would be madebut Petronas is likely to get the highest prices for the gas itcan pump into the UK gas grid in the coldest winter months ofJanuary and February.
Petronas is one of the world's top LNG producers but shipsnearly all the super-cooled gas it produces on the island ofBorneo to other Asian markets where sales prices are typicallyhigher than in Europe.
But rapidly rising demand at home has led the state giant tobuild LNG import terminals in Malaysia and Qatargas begansupplying Petronas' first LNG receiving terminal there in July.
Petronas' 50 percent stake in the Dragon import terminalgives it the capacity to import around 2.7 mtpa of LNG into theUK, Europe's biggest gas market.