QatarEnergy will transfer to China's Sinopec a 5% stake in the development of the huge North Field East (NFE) expansion project, the largest project in the history of the LNG industry, the Qatari state-owned firm said on Wednesday.
QatarEnergy has signed a definitive partnership agreement with China Petrochemical Corporation (Sinopec) for the NFE expansion project, which marks the entry of Sinopec as a shareholder in one of the NFE joint venture companies that own the NFE project.
Pursuant to the terms of the agreement, QatarEnergy will transfer to Sinopec a 5% interest in the equivalent of one NFE train with a capacity of 8 million tons per annum (MTPA). This agreement will not affect the participating interests of any of the other shareholders, QatarEnergy said.
The Qatari company picked last year TotalEnergies, Shell, and ConocoPhillips as partners to hold minority stakes in the NFE and North Field South (NFS) expansion projects.
Commenting on the deal with Sinopec on Wednesday, Saad Sherida Al-Kaabi, Qatar's Minister of State for Energy Affairs and President and CEO of QatarEnergy, said, "Today's event underscores QatarEnergy's commitment to deepening its relationships with key LNG consumers, while prioritizing long-term strategic partnerships and alignment with world class partners from China, represented by Sinopec here today."
At the end of last year, QatarEnergy signed the longest-term contract in the history of the LNG industry in a deal to supply LNG to Sinopec for 27 years.
Qatar announced in 2021 the world's largest LNG project, which is set to raise its LNG production capacity from 77 million tons per annum (mmtpa) to 110 mmtpa. The Gulf gas and oil producer also plans another expansion phase at the North Field, the world's largest natural gas field, which it shares with Iran. The second expansion phase will be the North Field South Project (NFS), set to further increase Qatar's LNG production capacity from 110 mmtpa to 126 mmtpa, with an expected production start date in 2027.
By Tsvetana Paraskova for Oilprice.com
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Comments
The NFE LNG development project will raise Qatari production capacity from 77 mtpa currently to 110 mtpa by 2024/25 and 126 mtpa by 2027.
And with an astute business touch which will ensure for it a guaranteed market share in the future and also finance for the expansion project, Qatar picked last year TotalEnergies, Shell, and ConocoPhillips as partners to hold minority stakes with Sinopec joining as well.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert