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China signs 27-year gas deal with QatarEnergy to secure supply | Business and Economy News

Qatar Energy has signed a 27-year contract to supply China’s Sinopec with the longest supply of liquefied natural gas (LNG) ever, as volatility drives buyers to seek long-term supplies.

ever since Russia’s invasion of Ukraine in FebruaryLNG competition intensifies, Especially Europe needs a huge amount It will help replace Russian pipeline gas, which accounted for nearly 40% of the continent’s imports.

European companies looking to buy LNG had to consider how Asian buyer Just before signing the deal with Sinopec, Qatar Energy CEO Saad Al Kaabi told Reuters.

“Today marks an important milestone for the first sale and purchase agreement (SPA) for the Northfield East project, which is 4 million tonnes in 27 years for China’s Sinopec,” Alkabi said.

“This means that long-term deals are here and important for both sellers and buyers,” he said in an interview in Doha, noting that the deal is the LNG sector’s single largest on record. added that it was a contract of sale.

Northfield is part of the world’s largest gas field, which Qatar shares with Iran, which Iran calls its share South Perth.

QatarEnergy signed five contracts for Northfield East (NFE) earlier this year. This is the first and larger of his two-phase Northfield expansion plan, which will boost Qatar’s liquefaction capacity to 126 million tonnes per annum by 2027 with six of his LNG. Includes train. 77 million.

It then signed three partners for the second phase of its expansion, North Field South (NFS).

Monday’s deal, confirmed by Sinopec, is the first supply deal to be announced at the NFE.

“This will take our relationship to new heights as we have a SPA that will last into the 2050s,” said al-Kaabi.

“This sends the message that many Asian buyers are actually approaching us for long-term deals as they see the future gas volumes getting smaller and smaller.”

long term supply

Al-Kaabi said talks are underway with other buyers in China and Europe who want stable supplies.

Qatar is already the world’s largest LNG exporter, and its Northfield expansion project will increase its position and help ensure long-term supplies of gas to Europe as the continent seeks alternatives to Russian flows. Helpful.

“The recent volatility has made buyers understand the importance of providing a fixed, long-term supply at a reasonable price over an extended period of time,” Alkabi said.

“There aren’t many projects that have made final investment decisions. .East and Northfield South.

Al-Kaabi also said there is a growing global recognition that gas should be an integral part of any energy transition.

“The wind isn’t always blowing and the sun isn’t always shining,” he said, adding that Qatar’s LNG is “the least carbon-intensive solution.”

Pricing for the Sinopec deal will be similar to other deals historically associated with crude oil.

“The way we price deals with Asia is loosely linked. We have done it this way in the past, and it is the mechanism we will continue to use.”

The transaction was closed on a free-of-float basis, meaning Qatar Energy will provide the transportation and delivery of the LNG.

al-Kaabi added that negotiations are underway with several entities on financing expansion projects in the Gulf States.

Sinopec said in a statement that the supply agreement is a key element of the NFE’s integrated partnership and indicates it may be involved in share talks.

Qatar Energy maintains a 75% stake in the entire expansion and may transfer up to a 5% stake from its holdings to some buyers, Alkabi said.

“The key buyers who want to commit long-term with significant volume want to see some of the benefits of their upstream business…so if they do, it’s a significant win and will make the partnership even stronger.” I think it will be something.”

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