Page 6 - AsianOil Week 39 2021

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the next three months and would track prices expected temperatures in Northeast Asia, cou-
on a delivered, ex-ship basis for shipments of pled with limited LNG supplies, were exacerbat-
90,000-210,000 cubic metres of LNG. ing the problem.
The launch of China’s first spot LNG index The gas supply pinch comes at a difficult time
quotes comes amid a global gas supply crunch for China, which has been pushing a domestic
that propelled the Asian LNG spot price to a coal-to-gas transition for a number of years. This
record high on September 30. S&P Global Platts has not only resulted in swathes of residential
said its Japan-Korea-Marker (JKM) rose to heating systems being converted to run on the
$34.47 per mmBtu. cleaner-burning fuel but has also seen the wide-
“The global LNG price rally is largely driven spread closure of smaller, less efficient and more
by the European gas situation,” said Platts’ global pollution coal mines.
director of LNG, Ciaran Roe. Europe has been However, with temperatures plummeting
struck by a perfect storm of suppressed gas stor- and both supplies of coal and gas now scarcer
age, constrained LNG imports and surging gas than expected, around two-thirds of China’s
demand. The analyst added that colder than provinces are reportedly rationing power.™

QP signs 15-year LNG supply

contract with CNOOC

PROJECTS & STATE-OWNED Qatar Petroleum this week its initial liquefaction capacity, but now has the
COMPANIES signed a 15-year sales and purchase agreement expertise to go it alone.
(SPA) to supply 3.5mn tonnes per year (tpy) of Qatar is also increasing its role in its own
LNG to a subsidiary of China National Offshore regional market with a 15-year, 3mn tpy sup-
Oil Corp. (CNOOC). The deal was signed with ply deal with Kuwait Petroleum Corp. (KPC)
CNOOC Gas and Power Trading & Marketing also beginning in January, the first long-term
for delivery of cargoes beginning in January agreement signed for Kuwait’s new LNG Import
2022. terminal (LNGI), which is expected to achieve
The deal takes the total volume of LNG deals commercial launch in March.
agreed by QP during the first nine months of This week’s deal was signed by HE Saad
2021 to 14mn tpy, with deliveries of 12.75mn tpy Sherida Al-Kaabi Qatar’s Minister of State for
due to begin in January 2022. The total volume Energy Affairs and QP’s president and CEO, and
covered by these deals over their 10- to 20-year CNOOC chairman Wang Dongjin.
terms is more than 170mn tonnes of LNG. During the virtual signing ceremony,
According to a research note by consultancy Al-Kaabi said: “We are pleased to further build
IGM Energy, at 52.5mn tonnes, the CNOOC upon our strong relationship with CNOOC with
contract is the largest by volume. the signing of this new long-term LNG supply
Unsurprisingly, all of these agreements have agreement. We are especially proud to continue
been signed with Asian countries as Qatar seeks to meet the People’s Republic of China’s growing
to strengthen its position in the region as its need for cleaner energy that LNG provides and
North Field Expansion (NFE) project increases are thankful to CNOOC for partnering with us
the emirate’s liquefaction capacity from 79mn as their trusted LNG supplier.”
tpy currently to 110mn tpy by 2025/26 and Since the shipment of the first LNG cargo to
126mn tpy by 2027. NFE is the world’s sin- CNOOC in September, QP said that as of August
gle-largest LNG project. QP took a final invest- this year, Qatar has delivered a total of 715 LNG
ment decision (FID) on NFE alone earlier this cargoes to China, of which 270 shipments con-
year having previously relied on IOCs’ exper- taining more than 24mn tonnes of LNG have
tise – as well as their investments – to develop been delivered to CNOOC.™

P6 www. NEWSBASE .com Week 39 30•September•2021