China’s Sinopec, QatarEnergy Sign 27-Year LNG Supply Deal

China agreed on another decades-long liquefied natural gas deal with Qatar in a further move to safeguard its energy security.

China Petroleum & Chemical Corporation signed a 27-year liquefied natural gas deal with QatarEnergy, the Gulf company said on Saturday. The move adds to the Gulf nation’s recent flurry of new contracts from both Europe and Asia.

The joint venture between the Middle East company and Sinopec will deliver 3 million tons of LNG per year from the North Field South project to Sinopec’s receiving terminals in China. Earlier in October, Eni SpA, TotalEnergies SE and Shell Plc — also investors in Qatar’s LNG expansion — signed similar contracts.

The agreement with Sinopec follows a similar deal signed in Doha last April, when the Chinese company directly backed an LNG plant in Qatar, one of the world’s top exporters of the super-chilled fuel. This time around, Sinopec will take a 5% interest in a joint venture company with a processing capacity of 6 million tons a year, according to the release.

The agreement also marks the latest in a flurry of deals to lock-in gas supply for decades amid intensifying global competition for the fuel, particularly between Europe and Asia. Several European states are now relying more on LNG to meet energy demand after Russia cut most of its pipeline flows to the region last year.

Source from: Bloomberg