Qatar Signs Its First-Ever Five-Year Crude Supply Deal with Shell

QatarEnergy has signed a deal with Shell under which the state firm of the tiny Gulf oil and gas producer will deliver up to 18 million barrels of crude annually to the supermajor, in the first-ever five-year crude sales agreement for the Qatari company.

QatarEnergy will start supplying Shell International Eastern Trading Company in Singapore with up to 18 million barrels per year of Qatar Land and Qatar Marine crudes, beginning in January 2024.

“We are delighted to sign our first ever five-year crude sales agreement,” said Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, the President and CEO of QatarEnergy.

“This agreement further strengthens QatarEnergy’s relationship with Shell, which is not only a reliable crude oil off-taker, but also a major customer and a strategic partner of QatarEnergy.”

The crude oil supply deal is the latest agreement between QatarEnergy and Shell, which have a long-standing strategic partnership through several shared investments in the energy industry, including in QatarEnergy’s huge LNG expansion projects in Qatar.

Two months ago, QatarEnergy and Shell signed two long-term LNG deals to supply LNG from Qatar to the Netherlands for 27 years starting in 2026 when Qatar’s first export expansion projects are expected to come online.

Under the sale and purchase agreements, Qatar and Shell will deliver up to 3.5 million tons per year of LNG to the Gate LNG terminal in the port of Rotterdam, the Qatari firm said in October.

Shell is a minority partner in some of Qatar’s huge expansion projects. The UK-based supermajor holds a 6.25% share in the North Field East (NFE) and a 9.375% share in the North Field South (NFS) expansion projects.

In October, Qatar broke ground for the world’s largest LNG project, the North Field expansion project, which will boost the tiny Gulf country’s export capacity by 48 million tons per annum (mmtpa) by 2027.

In July this year, Al-Kaabi said that “40% of all the new LNG that will come to the market by 2029, when all our projects are up and running, is going to be from QatarEnergy.”   

By Charles Kennedy for Oilprice.com

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