Qatar has dropped plans to build a 3.5 billion euro ($4.82 billion) energy hub in Greece, a Greek official said on Wednesday, a setback for Greek hopes to receive up to $5 billion in investment from the cash-rich country.

"The two Qatari companies involved, Qatar Petroleum and the Qatar Investment Authority could not agree with their Greek partners on the viability of the project," deputy foreign minister Spyros Kouvelis told Flash radio.

The two countries signed in May a non-binding memorandum to explore the possibility of building a complex of LNG terminals and a power station to export electricity to Italy.

The deal had paved the way for a wider framework agreement between the two countries last month, in which the Gulf emirate said it might invest up to $5 billion in Greece, from banking and real estate to energy and telecommunications.   

Kouvelis said the setback will not hurt Qatar's interest in investing in Greece. "Qatar leaves the door open to come up with new proposals, even in energy."    

Debt-laden Greece, the euro zone's least competitive economy, needs foreign investment to help balance its payments deficit and pay down 110 billion euros in EU/IMF bailout loans it secured in May.

Greece has become increasingly reliant on foreign investment to boost its ailing economy as it clamps down on state spending to slash its budget deficit under the bailout agreement.  -Reuters