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Qatar and China are set to sign imminently a new major long-term deal under which QatarEnergy will supply LNG to a Chinese state-controlled energy giant, the Financial Times reported on Tuesday.
At the end of last year, Qatar’s state firm QatarEnergy signed the longest-term contract in the history of the LNG industry in a deal to supply liquefied natural gas to Chinese state energy giant Sinopec for 27 years.
QatarEnergy will supply China Petroleum & Chemical Corporation (Sinopec) with 4 million tons per annum (MTPA) of LNG to China from the North Filed East (NFE) expansion project, just as global competition for LNG intensified amid a European rush to secure non-Russian gas supply.
Qatar has traditionally preferred long-term supply deals with customers, at which Europe balked earlier last year. But more recently, even European companies have started negotiations for longer-term supply with LNG providers.
China, for its part, is looking to secure LNG to avoid more spot buying amid uncertainties over the Asian spot prices in the coming years.
Now QatarEnergy and China National Petroleum Corporation (CNPC) are set to sign this week another 27-year deal, sources briefed on the plans told FT on Tuesday.
CNPC is also expected to receive 5% in one LNG train at the North Field expansion, according to FT’s sources.
In April, QatarEnergy said it would transfer a 5% stake in the development of the huge North Field East (NFE) expansion project to Sinopec, which signed the first 27-year LNG supply deal between Qatar and China in November last year.
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.
QatarEnergy is also close to finalizing long-term LNG supply agreements with the UK, France, and Italy, Saad al-Kaabi, Qatar’s Minister of State for Energy Affairs and QatarEnergy’s CEO, told FT.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.