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Emboldened by a recent 20-year LNG deal a German energy company signed with a U.S. exporter, Qatar—another top LNG exporter—is now seeking long-term contracts with EU importers, which are racing to procure non-Russian gas, Bloomberg reported on Thursday, citing sources with knowledge of the talks.
EU nations, for their part, want shorter LNG import commitments, as the bloc is also looking to stick to its goals to reach net-zero by 2050. The EU importers also argue that the Qatari supply offer is less flexible and doesn’t allow much room for diverting supply to other buyers, according to Bloomberg’s sources.
Qatar signed last month an agreement with Germany on energy partnership that could grow into LNG trade relations, but the countries haven’t signed any deals yet.
But German utility EnBW signed earlier this week a 20-year supply deal with U.S. firm Venture Global LNG in a first direct binding offtake agreement for long-term U.S. LNG signed by a German company.
This, according to Bloomberg’s sources, has emboldened Qatar to seek long-term deals with EU buyers.
Qatar announced last year the world’s largest LNG project, which is set to raise Qatar’s LNG production capacity from 77 million tons per annum (mmtpa) to 110 mmtpa. The project, expected to start production in the fourth quarter of 2025, will cost US$28.75 billion. Qatar 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.
Over the past week, state firm QatarEnergy has picked international oil and gas majors ExxonMobil, ConocoPhillips, Eni, and TotalEnergies as partners in the North Field East expansion project.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com