Page 5 - AsianOil Week 24 2022

AsianOil COMMENTARY AsianOil

Venture Global is expected to be China’s larg- “Chinese participation in the trains are more
est supplier of US LNG once the agreements of a financial investor, as the stake is very small.
come into force. The key is the price negotiations for the long-
Offtake agreements announced by US LNG term gas offtakes,” another of the sources was
developers in recent weeks have also involved a quoted as saying.
number of smaller Chinese buyers. Chinese investments and offtake agreements
Locking in supplies from Qatar is also not would also be considered advantageous by
unheard of among Chinese firms. In September Qatar, which is seeking to expand its customer
2021, a CNOOC subsidiary struck a deal with base in Asia. If the investments are finalised,
QatarEnergy, then known as Qatar Petroleum, they would represent the first such partnership
covering the supply of 3.5mn tpy of LNG to between Qatar and China.
China over a 15-year period. Several smaller
Chinese companies also signed supply deals What next?
with QatarEnergy in late 2021. According to Reports about the potential Chinese investments
Refinitiv Eikon data, Qatar was China’s largest in NFE come days after QatarEnergy selected
LNG supplier after Australia in the first five France’s TotalEnergies as its main joint venture Efforts to secure
months of 2022. partner for development of the expansion pro-
Now, efforts to secure more long-term LNG ject. The Qatari company said more partners more long-term
supplies are being reported to be a major driver were set to join the NFE project, with final terms LNG supplies are
behind CNPC and Sinopec’s plans to invest in agreed and the relevant announcements coming
NFE. According to two of Reuters’ sources, the soon. being reported to
two companies are negotiating with QatarEn- QatarEnergy received offers equivalent to
ergy to buy up to 4mn tpy of LNG each for up to double the amount of equity in NFE that it has be a major driver
27 years. If a deal is reached, this would be the made available to partners, which it said under-
largest supply deal to date between Qatar and scored the “high-quality investment case” of the behind CNPC and
China. project. Bids for equity are also understood to Sinopec’s plans.
Entering into NFE is also anticipated to be have been submitted in May 2021 by Chevron,
beneficial to the Chinese companies in terms ConocoPhillips, ExxonMobil, Eni and Shell.
of access to expertise in an international LNG Partners are joining the project even though
megaproject. QatarEnergy had previously said it had the
“The participation, even of a small stake, expertise and financing to go it alone on the
would give [the] Chinese direct access to the NFE expansion if necessary.
highly globalised project and [the chance to] Judging by the reports this week, unlike deals
learn [about] its management and operational with Western partners that appear to have been
expertise,” said one of Reuters’ sources, which finalised, talks with the Chinese firms still have
the news service described as a senior Bei- some way to go. But a firm agreement could be
jing-based industry official. announced soon.™

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