China agreed another decades-long liquefied natural gas deal with Qatar in a further move to safeguard its energy security.
China National Petroleum Corp. signed a 27-year LNG purchase agreement for 4 million tons annually with QatarEnergy on Tuesday. Supply will begin in 2026 and CNPC will take a 5% equity stake in a production train at Qatar’s North Field East expansion project, the country’s energy minister and boss of QatarEnergy Saad al-Kaabi said at a signing ceremony in Doha.
CNPC is looking to strengthen energy cooperation with Qatar during Chairman Dai Houliang’s visit to the Middle East this week. China is on track to be the world’s largest LNG importer this year, with Shell Plc saying the nation’s demand could nearly double through 2040.
The new LNG deal — one of the industry’s longest-ever supply pacts — delivers advantages for both nations. China needs to secure fuel at an affordable rate to meet rising energy demand, while Qatar needs buyers for the gas from a massive expansion scheduled to come online in the middle of this decade.
China Petroleum & Chemical Corp., also known as Sinopec, signed a similar 27-year deal with Qatar last year. Sinopec also took a stake in the Qatar expansion project earlier this year. At the signing ceremony in April, Kaabi said QatarEnergy was “prioritizing long-term strategic partners from China.”
Qatar is also close to signing additional deals with buyers in France, Italy and the UK, said Kaabi. Qatar has been sending less LNG to Europe this year after ending its commitment to avoid diverting cargoes it was contractually allowed to send elsewhere. The pledge was made to help out the gas-strapped continent following Russia’s invasion of Ukraine.
Source from: Bloomberg