Qatargas is to start supplying liquefied natural gas (LNG) to Repsol's Canaport terminal in Canada before the end of 2010, Spain's largest oil company said on Thursday.

The long-term supply deal with the world's largest exporter of super-cooled gas is expected to help meet rising demand for in eastern Canada and north-eastern parts of the US and could limit the amount of Qatari LNG delivered to Europe.

Canaport is in New Brunswick province which borders the US state of Maine.

"The new LNG supply from Qatar strengthens Repsol's position in the Canadian and Northeast US markets as a reliable, diversified, flexible supplier of natural gas," said Benjamin Palomo, executive director of LNG for Repsol in a statement.

The Canaport deal could absorb some LNG that is expected to enter an already well supplied global market as big Qatari production facilities open in the next few months.

"Deliveries will start before the end of the year," the spokesman for the Madrid-based company said.

Repsol - which controls 75 per cent of Canaport with Fort Reliance holding 25 per cent - did not specify how much LNG would be delivered by Qatargas under the deal nor the price to be paid.

Qatargas will deliver the LNG using both Q-Flex and Q-Max ships which carry between 210,000 and 266,000 cubic metres of gas each.

Canaport LNG can pump 28 million cubic metres of natural gas per day into Canada and on into the United States by pipeline.-Reuters