Qatar's deal to supply liquefied natural gas to Spain's Repsol will run for three years, with the LNG destined solely for Canada, Qatar's energy minister said.

State-controlled Qatargas and Spain's biggest oil company announced a multi-year deal to supply Repsol's Canaport terminal in Canada's New Brunswick province last week but gave no details on volumes, duration or whether Repsol had to deliver the fuel to Canada.

Qatari Energy Minister Abdullah bin Hamad al-Attiyah told reporters the Repsol deal would last about three years -- after which many industry observers expect the current gas glut to end and prices to rise -- but did not detail the sales volume.

"I think this is short-term, for three years or so," Attiyah said when asked about the Repsol deal, adding the LNG was for use "only in Canada."

Qatar, the world's largest exporter of LNG which hopes to be able to produce up to 77 million tonnes a year by early 2010 as new production lines open over the next few months, is in talks with other potential buyers.

"So far we are having a lot of discussions, we will announce it when the time is right," Attiyah said.

After former big LNG market the US lost much of its appetite for imported gas over the last few years because of a North American shale gas boom, Qatar has increasingly relied on China to make up for lost US sales.

Qatar hopes to sell more LNG to China but Attiyah said it was unclear whether a new deal would be signed this year.

"I hope so. We are still discussing, but there is an improvement. Qatargas is engaging now, to finalize the deal," he said.

In the last few weeks France's GDF Suez has signed  three-year deals to supply LNG to China and Korea.

Many analysts expect supplies of gas to tighten from around 2013, pushing up prices for the key power generation fuel, after a glut in supply created by the economic downturn, a US shale gas boom and rising Qatari output. – Reuters