• Oil & Gas - News
  • Updated: June 20, 2023

Qatar To Seal Second Massive Long-Term LNG Deal With China

Qatar To Seal Second Massive Long-Term LNG Deal With China

Qatar and China are about to execute a new big long-term arrangement in which QatarEnergy would provide LNG to a Chinese state-controlled energy company. The Financial Times reported on Tuesday.

Qatar's state business QatarEnergy inked the longest-term contract in LNG industry history at the end of last year, supplying liquefied natural gas to Chinese state energy giant Sinopec for 27 years.

QatarEnergy will provide China Petroleum & Chemical Corporation (Sinopec) with 4 million tonnes per year (MTPA) of LNG from the North Filed East (NFE) expansion project, just as global competition for LNG intensifies amid a European rush to secure non-Russian gas supplies.

Qatar has always favoured long-term supply agreements with consumers, which Europe rejected earlier this year.

However, European corporations have lately begun discussions with LNG sources for longer-term supplies.

China, for its part, is aiming to secure LNG in order to prevent further spot purchases in the coming years as Asian market prices remain unpredictable.

According to sources briefed on the arrangements, QatarEnergy and China National Petroleum Corporation (CNPC) are likely to sign another 27-year contract this week.

According to FT sources, CNPC is also anticipated to obtain 5% of one LNG train at the North Field expansion.

QatarEnergy announced in April that it will sell a 5% interest in the massive North Field East (NFE) extension project to Sinopec, which inked the first 27-year LNG supply agreement between Qatar and China in November last year.

Qatar announced the world's biggest LNG project in 2021, with a capacity increase from 77 million tonnes per year (mmtpa) to 110 mmtpa.

QatarEnergy is also nearing completion of long-term LNG supply deals with the United Kingdom, France, and Italy, according to Saad al-Kaabi, Qatar's Minister of State for Energy Affairs and QatarEnergy's CEO.

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