Qatar strikes second big LNG supply deal with China
Send a link to a friend
[June 20, 2023] By
Andrew Mills and Maha El Dahan
DOHA (Reuters) -Qatar on Tuesday secured its second large gas supply
deal with a Chinese state-controlled company in less than a year,
putting Asia clearly ahead in the race to secure gas supplies from
Doha's massive production expansion project.
China National Petroleum Corporation (CNPC) and QatarEnergy signed a
27-year agreement, under which China will purchase 4 million metric tons
of liquefied natural gas (LNG) a year from the Gulf Arab state.
CNPC will also take an equity stake in the eastern expansion of Qatar's
North Field LNG project, QatarEnergy chief Saad al-Kaabi said at the
signing.
The stake is the equivalent of 5% of one LNG train with capacity of 8
million metric tons a year.
"Today we are signing two agreements that will further enhance our
strong relations with one of the most important gas markets in the world
and key market for Qatari energy products," Kaabi said.
In an identical deal, QatarEnergy sealed a 27-year supply agreement with
China's Sinopec in November for 4 million metric tons a year. The
state-owned Chinese gas giant also took an equity stake equivalent to 5%
of one LNG train of 8 million metric tons a year capacity.
Asia, with an appetite for long-term sales and purchase agreements, has
outpaced Europe in locking in supply from Qatar's two-phase expansion
plan that will raise its liquefaction capacity to 126 million metric
tons a year by 2027 from 77 million.
Tuesday's deal will be QatarEnergy's third deal to supply LNG from the
expansion to an Asian buyer.
Other Asian buyers are also in talks for equity stakes in the expansion,
Kaabi said.
DEALS WITH 'VALUE-ADDED PARTNERS'
Qatar is the world's top LNG exporter and competition for LNG has ramped
up since the beginning of the war in Ukraine, with Europe in particular
needing vast amounts to help replace Russian pipeline gas that used to
make up almost 40% of the continent's imports.
[to top of second column] |
CNPC (China National Petroleum
Corporation) logo and stock graph are seen through magnifier
displayed in this illustration taken September 4, 2022. REUTERS/Dado
Ruvic/Illustration/File Photo
Reuters had earlier reported that CNPC was close to finalising a
deal to buy LNG from QatarEnergy over nearly 30 years from the North
Field expansion project.
QatarEnergy had previously said that it could give up to 5% stakes
in the gas trains linked to its North Field expansion to what Kaabi,
the Gulf state's energy minister and CEO of QatarEnergy, described
as "value-added partners".
In April, China's Sinopec became the first Asian energy company to
become a "value-added" partner in the project.
QatarEnergy has also signed equity partnerships on the project with
international oil companies but has said it plans to retain a 75%
stake in the North Field expansion, which will cost at least $30
billion including construction of liquefaction export facilities.
As Beijing's ties with the United States and Australia, Qatar's two
biggest LNG export rivals, are strained, Chinese national energy
firms increasingly see Qatar as a safer target for resource
investment.
The Qatar Investment Authority (QIA), the country's $445 billion
sovereign wealth fund, will manage most of the revenues from the
North Field expansion," Kaabi said.
"I think the majority of the revenue of what's going to come from
this North Field expansion will go into a future generation wealth
fund in QIA ... making sure that the Qatari people and people living
in Qatar are well taken care of."
(Reporting by Andrew Mills in Doha and Maha El Dahan in Dubai,
additional reporting by Nayera Abdallah and Kanjyik Ghosh; Writing
by Andrew Mills; Editing by Kim Coghill, Christopher Cushing and
Emelia Sithole-Matarise)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|