QatarEnergy has clinched a 4 million metric ton/year (mmty) LNG supply agreement with China Petroleum and Chemical Corp., aka Sinopec, its first for the developing North Field East (NFE) expansion.
The two firms signed the 27-year sale and purchase agreement (SPA) during a ceremony in Doha, marking the longest supply contract signed by a Chinese offtaker. The supply of 4 mmty over almost three decades could begin in 2026.
QatarEnergy CEO Saad Sherida Al-Kaabi said the landmark agreement builds on the “special” relationship Qatar and China have formed through several energy sector deals and “which we are excited about further growing and expanding into the 2050s.”
QatarEnergy and Sinopec previously signed a 10-year SPA last year for 2 mmty from the legacy North Field LNG project.
The first SPA for QatarEnergy’s expansion project comes less than a month after it announced its final foreign investment partners for both phases of the project. NFE, backed by ConocoPhillips, Eni SpA, ExxonMobil, Shell plc and TotalEnergies, is expected to begin shipping cargoes first in 2026. It would consist of four, 8 mmty liquefaction trains.
North Field South could consist of two, 8 mmty trains and is backed by ConocoPhillips, Shell and TotalEnergies. It is estimated to begin shipping cargoes in 2027.
Along with the 2.5 Bcf/d Golden Pass LNG joint venture with ExxonMobil expected to enter full service sometime in 2025, Qatar Energy is expected to launch the largest additions to global LNG export capacity within the decade.
After two years of low interest during the Covid-19 pandemic, rising global commodity prices have stoked long-term agreements for LNG projects this year. While European buyers have purchased more spot volumes, portfolio players and specifically Chinese firms have led the charge in new long-term contracts.
In a report published by the Japanese trade ministry Monday, Japanese LNG buyers overwhelmingly said they couldn’t find any available long-term contracts for the fuel before 2026. Japan is one of the world’s largest buyers of LNG. It was surpassed by China as the world’s largest buyer last year.
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