Qatar signs world’s ‘longest’ gas supply deal with China
Qatar has announced a 27-year natural gas supply deal with China. According to QatarEnergy CEO Saad Sherida Al-Kaabi, the deal would be the “longest” ever seen as it strengthened ties with Asia at a time when Europe is scrambling for alternative sources.
QatarEnergy earlier this year signed five deals for North Field East (NFE), the first and larger of the two-phase North Field expansion plan, which includes six LNG trains that will ramp up Qatar’s liquefaction capacity to 126 million tonnes per year by 2027 from 77 million.
In the second phase of the expansion, QatarEnergy signed contracts with three partners for North Field South (NFS). According to a report in Reuters, Qatar is already the world’s top LNG exporter and its North Field expansion project will boost that position and help guarantee long-term supplies of gas to Europe as the continent seeks alternatives to Russian flows.
“I think the recent volatility has driven buyers to understand the importance of having long-term supply that is fixed and that’s reasonably priced for the long term”,” Kaabi said. Adding that, “The way we’re pricing our deals with Asia is crude linked. We’ve done it this way in the past and that’s the mechanism we’re using going forward.”
The deal was signed on an ex-ship basis, this means that QatarEnergy will be responsible for the shipping and delivery of the LNG.
Kaabi has said that negotiations are ongoing for an equity stake in the Gulf country’s expansion project. The supply contract is a key component for an integrated partnership in the NFE, Sinopec said in a statement, indicating that it could be involved in the negotiations.
