As it increases output from the largest natural gas field in the world, Qatar on Tuesday announced a second 27-year supply agreement with a Chinese firm.
Qatar Inks Gas Supply Deal With China: The pact, which calls for the supply of four million tonnes yearly to the China National Petroleum Corporation (CNPC), equals the parameters of a contract signed in November with Sinopec, making it the longest agreement in the history of the sector.
Qatar’s gas, primarily sold to Asian nations led by China, Japan, and South Korea, has gained increased attention from European nations since Russia’s invasion of Ukraine at the beginning of last year.
Over the course of 27 years, Qatar will provide China with four million tonnes per year of natural gas from the North Field East Expansion Project, Kaabi said at a signing ceremony in Doha.
This one will mark the second LNG (liquefied natural gas) sale and purchase deal between the North Field East Expansion Project and China.
Qatar is increasing its LNG output by more than 60% to 126 million tonnes annually by 2027 by extending operations at North Field, which has the largest natural gas reserves in the world and extends under the Gulf into Iranian territory.
In a separate transaction, CNPC acquired a 5% stake in North Field East, which is equal to one gas-liquefaction facility producing eight million tonnes of LNG annually.
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According to CNPC chairman Dai Houliang, “it lays a solid foundation for the energy cooperation between the two sides in the next three decades.”
“CNPC will continue to actively explore all-around cooperation with QatarEnergy across the hydrocarbon industry chain and other areas like green and low carbon energies,” he continued.
The deals’ dollar amounts were not disclosed. Qatar has reached a number of significant deals related to the North Field expansion, making its per-capita GDP one of the greatest in the world thanks to its gas wealth.
With Bangladeshi state-owned company Petrobangla, QatarEnergy reached a 15-year supply agreement earlier this month. Last month, it granted Technip Energies and Consolidated Contractors Company of France a $10 billion contract for the engineering, procurement, and construction of the North Field South project.
Sinopec acquired a five percent interest in the North Field East development in April, making it the first Asian company to do so.
In November, Qatar made its first significant contract announcement with Germany, wherein it agreed to sell up to two million tonnes of gas per year for 15 years. Qatar struck this deal despite supplying the majority of its gas to Asian nations.
The negotiations took several months because Germany refused to sign the lengthy contracts that Qatar typically requires to support its significant investment.
The German government was under further pressure to find fresh sources of supplies as a result of Russia’s invasion of Ukraine.