Page 14 - GLNG Week 47 2022

GLNG MIDDLE EAST GLNG

QatarEnergy clinches longest LNG

deal with Sinopec

CONTRACTS QATARENERGY has struck a 27-year deal to raise Qatar’s LNG production capacity from the
deliver LNG to China’s Sinopec, marking the current 78mn tpy to 126mn tpy by the late 2020s.
longest such agreement so far, as buyers scram- QatarEnergy earlier this year struck five deals
ble to lock in long-term supplies amid a volatile with foreign partners for NFE, the larger of the
and tight market. two expansion phases that will involve the con-
The LNG market is experiencing an unprec- struction of six new LNG trains. It later brought
edented supply crunch, as Europe scrambles to on board with partners for NFS.
replace lost Russian volumes that used to cover However, the agreement on November 21 is
40% of its gas needs, following Moscow’s inva- the first supply agreement to cover offtake from
sion of Ukraine. This has diverted cargoes away NFE.
from Asia, which previously offered premium “We are very happy about this deal with Sin-
LNG prices. However, many of the long-term opec because we have had a long-term relation-
supply deals that have been reached since the ship in the past and this takes our relationship to
war began are notably with Asian buyers, par- new heights as we have an SPA that will last into
ticularly in China, as European governments are the 2050s,” Kaabi said.
more reluctant to lock in supplies over longer According to Kaabi, talks with other purchas-
terms, through fear of jeopardising their climate ers in China and Europe are continuing. Qatar
commitments. has jostled with Australia in recent years for the
“Today is an important milestone for the first status as the world’s biggest LNG supplier, but
sales and purchase agreement (SPA) for North the North Field expansions could seal its posi-
Field East project; it is 4mn tonnes for 27 years tion as number one for decades to come.
to Sinopec of China,” QatarEnergy CEO Saad “I think the recent volatility has driven buyers
al-Kaabi told Reuters in Doha, shortly before to understand the importance of having long-
the deal signing. “It signifies long-term deals are term supply,” Kaabi said.
here and important for both seller and buyer.” Negotiations for an equity stake in the expan-
North Field is the world’s biggest gas deposit, sion projects also continue with several partners,
shared between Qatar and Iran. It is set to he said. QatarEnergy has maintained a 75%
undergo two expansion stages, North Field East interest in the expansion, but could cede a fur-
(NFE) and North Field South (NFS), that will ther 5% to some buyers, he said.™

P14 www. NEWSBASE .com Week 47 24•November•2022