China’s Sinopec Gets 5% Stake in Qatar’s North Field East Project

China’s Sinopec Gets 5% Stake in Qatar’s North Field East Project

/ Financial News / Thursday, 13 April 2023 08:11

Chinese oil giant the China Petroleum and Chemical Corporation (Sinopec) has become the first Asian firm to get a stake in Qatar's expansion of North Field East (NFE) — the world's biggest natural gas reserves, which extend under the Gulf into Iranian territory.

QatarEnergy chief Saad Sherida Al-Kaabi, Qatar's energy minister, and Sinopec chairman Ma Yongsheng signed the agreement in the presence of other industry representatives.

QatarEnergy said Sinopec will get a five percent stake in the equivalent of an eight-million-ton production complex.

Sinopec will acquire 1.25% stake in the overall NFE expansion project following a 5% interest in one of the LNG trains, each of which have a capacity of 8 million mt/year, according to a senior executive.

Sinopec signed a 27-year supply deal last year that Qatar said is the longest ever made in the natural gas industry. China is already the biggest customer for Qatar's liquefied natural gas and one of the world's top LNG importers.

With the North Field East expansion, Qatar has embarked on a $28.75 billion project that will see annual output grow from 77 million tons a year to 110 million by 2027, according to state-owned giant QatarEnergy.

Al-Kaabi called the deal a "milestone agreement" and a new "landmark" for relations between the two countries.

"Today's event underscores QatarEnergy's commitment to deepening its relationships with key LNG consumers, while prioritising long-term strategic partnerships and alignment with world-class partners from China, represented by Sinopec here today," Al-Kaabi said in a QatarEnergy statement.

Meanwhile, Ma said the stake purchase would "enhance the security, stability, and reliability of clean energy supply.” He added, “I hope that the two companies will continue to explore new LNG cooperation opportunities based on the solid foundation we have laid together."

Other oil giants holding bigger stakes in the NFE project include Total Energies, Shell, ENI and ConocoPhillips.

QatarEnergy did not give a value for the Sinopec deal but said it "will not affect the participating interests of any of the other shareholders."

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