QatarEnergy and China Petroleum and Chemical Corporation (Sinopec) have agreed to a 27-year natural gas supply deal and have termed it the "longest" deal yet, as Qatar and China seek to strengthen ties.
Under the Sale and Purchase Agreement (SPA), QatarEnergy will send 4 million tons per annum (MTPA) of liquefied natural gas (LNG) to China from its new North Field East project.
“This is the first long-term SPA from the NFE project to be announced and marks the longest gas supply agreement in the history of the LNG industry,” said Saad Sherida Al-Kaabi, Qatar's energy minister and CEO of QatarEnergy.
Qatar’s main gas buyers in Asia are China, Japan and South Korea, while European countries have been negotiating with the gas-rich country for its gas supplies since Russia closed its taps.
Negotiations with European countries have struggled as Germany and others have been hesitant to sign the long-term deals made with Asian nations.
North Field is at the center of Qatar's expansion of its liquefied natural gas production by more than 60% to 126 million metric tons a year by 2027. China is the first country to seal a deal for North Field East.
The accord would "further solidify the excellent bilateral relations between the People's Republic of China and the State of Qatar and help meet China's growing energy needs," Kaabi said.
Meanwhile, Sinopec chairman Ma Yongsheng, participating in the virtual signing ceremony from Beijing, said it was a "milestone" accord, as "Qatar is the world's largest LNG supplier and China is the world's largest LNG importer." The agreement is the second LNG SPA between QatarEnergy and Sinopec, following the 10-year SPA signed in March 2021 for the supply of 2 MTPA to China.
He also told the gathering that he had "formally" requested, in October of last year, a share of Qatar's North Field South project. TotalEnergies of France, Shell of Britain and US giant ConocoPhillips will share the 25% foreign stake in the field.
Ma and Kaabi also discussed future potentials between Sinopec and QatarEnergy.
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