Qatar, China's CNPC sign 27-year gas deal
Qatar and the China National Petroleum Corporation have reached a deal to supply the latter with natural gas for the coming 27 years.
Qatar agreed Tuesday to supply the China National Petroleum Corporation (CNPC), Qatari energy minister Saad bin Sherida Al Kaabi.
Qatar will supply four million tons a year, Al-Kaabi said, QatarEnergy's CEO, seven months after a deal with the same terms was struck with China's Sinopec.
"Qatar will supply four million tons annually of natural gas from the North Field East Expansion Project to China over a period of 27 years," Al-Kaabi told a signing ceremony in Doha.
"This will become the second LNG (liquefied natural gas) sale and purchase agreement to China within the North Field East Expansion Project."
The two deals are the longest-ever seen in the liquefied gas industry.
Qatar, expanding its usage and exploitation of the LNG in the North Field, which has the world's biggest natural gas reserves, extends under the Gulf into Iran.
The expansion of the North Field's exploitation will see Qatar raising its LNG production by 60% to 12 million tons a year by 2027.
Asian countries, led by China, Japan, and South Korea, are the main importers of Qatari gas, a very precious resource for Europe since the phase-out of Russian gas in the European Union since the outbreak of the Ukraine war.
China in April set a precedent in the natural gas sector after its Sinopec became the first Asian company to partner with Doha's QatarEnergy on the expansion of North Field East.
China Petroleum and Chemical Corporation (Sinopec) submitted a request to acquire a share in the Qatari LNG project in November 2022, just after the firm signed a 27-year gas purchase agreement with QE - the longest LNG contract recorded in the Industry.
So far, Western energy companies have the biggest share in the project, making Sinopec's share acquisition a breakthrough.
The North Field is the largest recorded energy well - with estimated reserves of 1,810 Tcf of natural gas and which extends into Iran's maritime territory.
With the $28.75 billion expansion, QatarEnergy said it expects the annual production to increase from 77 million tonnes a year to 110 million by 2027 - 8 million tonnes of which will go to Sinopec, according to its new five percent share buy-in.
Commenting on the deal, Qatar's Energy Minister described it as a "milestone agreement" and a new "landmark" for relations between Doha and Beijing. Not providing further details on Sinopec's bid value, Minister Saad Sherida Al-Kaabi said it "will not affect the participating interests of any of the other shareholders."
Sinopec chief Ma Yongsheng stated that the stake acquisition would "enhance the security, stability, and reliability of clean energy supply. I hope that the two companies will continue to explore new LNG cooperation opportunities based on the solid foundation we have laid together."
Al-Kaabi announced in October that Shell will buy a 9.375% stake in North Field South (NFS), another LNG project developed by the country, which will increase Qatar's LNG output capacity by 16 million tons per year.
TotalEnergies SE also joined the project in September, with a 9.375% stake worth approximately $1.5 billion.
American ConocoPhilips energy giant later acquired the final shares offered by QE at 6.25%, while the state-owned energy company will keep 75% of the shares.