DOHA: Qatar has announced the signing of a second long-term gas supply agreement with a Chinese company on Tuesday, marking another milestone in its efforts to expand production from the world’s largest natural gas field.
The deal, spanning 27 years, entails supplying four million tons of natural gas annually to the China National Petroleum Corporation (CNPC). This agreement mirrors the terms of a previous deal with China’s Sinopec, making it the longest-ever seen in the industry.
Asian countries, led by China, Japan, and South Korea, have been Qatar’s primary gas market. However, European countries have shown increasing interest in Qatar’s gas since Russia’s invasion of Ukraine last year. This new agreement signifies Qatar’s commitment to meeting China’s growing energy demands.
During a signing ceremony in Doha, Qatar’s Minister of State for Energy Affairs, Saad Sherida al-Kaabi, stated, “Qatar will supply four million tons annually of natural gas from the North Field East Expansion Project to China over a period of 27 years. This will become the second LNG (liquefied natural gas) sale and purchase agreement to China within the North Field East Expansion Project.”
Qatar Aims to Increase LNG Production
By expanding activities at the North Field, which holds the world’s largest natural gas reserves and extends into Iranian territory beneath the Gulf, Qatar aims to increase its LNG production by over 60 percent, reaching 126 million tons per year by 2027.
As part of the agreement, CNPC also signed a separate deal for a five percent interest in the North Field East expansion, equivalent to one gas-liquefying complex producing eight million tons of LNG annually. CNPC Chairman, Dai Houliang, emphasized the significance of the agreement, stating, “It lays a solid foundation for the energy cooperation between the two sides in the next three decades.”
Qatar, known for its abundant gas reserves and high per-capita gross domestic product, has been actively engaging in major agreements surrounding the North Field expansion. In recent months, QatarEnergy secured a 15-year supply deal with Bangladeshi state firm Petrobangla, and awarded a $10 billion contract to France’s Technip Energies and Consolidated Contractors Company for the engineering, procurement, and construction of the North Field South project.
While Qatar primarily exports its gas to Asian countries, it made headlines in November by announcing its first major gas deal with Germany, involving the sale of up to two million tons annually for 15 years. Germany, under pressure to diversify its energy sources following Russia’s invasion of Ukraine, entered into lengthy negotiations before reaching the agreement with Qatar.
