Page 4 - GLNG Week 25 2022

GLNG COMMENTARY GLNG

Chinese firms reportedly in

advanced talks to invest in

Qatari LNG expansion

COMMMENTARY
CHINA’S national oil companies (NOCs) are CNOOC Ltd and Beijing Gas Group, to discuss
reportedly close to investing in Qatar’s North long-term LNG deals.
Field East (NFE) expansion project. NFE will
raise the Middle Eastern country’s liquefaction Securing supply
capacity from 77mn tonnes per year to 110mn The reports come as Chinese companies step up
tpy and represents the single largest LNG project efforts to lock in new long-term LNG supplies
in the world. The next expansion phase, North from a variety of sources. Mitigating against
Field South (NFS), is expected to take Qatar’s liq- spot market volatility is thought to be one of the
uefaction capacity to 126mn tpy by 2027. major drivers behind these efforts, and intensi-
Chinese interest in investing in Qatar’s LNG fying competition for LNG between Europe and
industry has been noted previously, but more Asia is also a likely contributor.
details have been reported by various media A series of announcements about new offtake
outlets this week. Three sources familiar with agreements involving large and small Chinese
the matter told Reuters that Sinopec and China players alike has been made since late 2021.
National Petroleum Corp. (CNPC) were in These include major deals signed between the
“advanced” talks with Qatar. They added that US’ Venture Global LNG and Sinopec, followed
the two Chinese companies were expected to by a separate agreement struck by the US com-
invest in 5% stakes each in two separate liquefac- pany with CNOOC. Indeed, Venture Global
tion trains being built as part of the North Field is expected to be China’s largest supplier of US
expansion. Four trains are due to be built in total LNG once the agreements come into force.
as part of the NFE project. Offtake agreements announced by US LNG
Separately, a source familiar with the sit- developers in recent weeks have also involved a
uation told Bloomberg that the investments number of smaller Chinese buyers.
under discussion were worth billions. Two Locking in supplies from Qatar is also not
other people told the news service that officials unheard of among Chinese firms. In September
from state-owned QatarEnergy had visited Sin- 2021, a CNOOC subsidiary struck a deal with
gapore earlier in June to meet Chinese compa- QatarEnergy, then known as Qatar Petroleum,
nies including CNPC and Sinopec, as well as covering the supply of 3.5mn tpy of LNG to

P4 www. NEWSBASE .com Week 25 24•June•2022