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China’s Sinopec has become the latest energy major to seal a 27-year LNG supply deal with QatarEnergy, for volumes of 3 million tons annually once the second phase of the North Field enters into operation.
The partnership deal will also see Sinopec take part in the development of that second phase, which would boost the production capacity of Qatar’s biggest source of gas to 126 million tons annually by 2026 from 77 million tons currently.
Work on the expansion project began last month, with Qatar’s energy minister commenting that “This major expansion comes at a crucial time, as natural gas occupies a pivotal position in the energy mix in a world facing geopolitical turbulences and is in dire need of clean energy sources that are in line with the global environmental goals.”
The expansion project involves the construction of six new liquefaction trains to process the gas extracted from the world’s largest offshore gas field.
A lot of global energy majors are taking part in the expansion and locking in future supply. In recent weeks, three European supermajors also struck long-term supply deals for LNG from the expanded North Field with QatarEnergy.
TotalEnergy signed its deal with the Qatari firm in early October, locking in an annual supply of 3.5 million tons of LNG for a period of 27 years beginning in 2026. The French company is also participating in the expansion project.
Shell, which also has a stake in the North Field expansion project, inked two deals with QatarEnergy for the supply of 3.5 million tons of liquefied natural gas annually, also for 27 years, beginning in 2026 when the expansion is completed.
The third major that secured long-term supply beyond 2050 was Italy’s Eni, which will start receiving up to 1 million tons of Qatari LNG starting in 2026.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.