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.
The new LNG deal—one of the industry’s longest-ever supply pacts—delivers advantages for both nations. China needs to secure fuel at an affordable rate to meet rising energy demand, while Qatar needs buyers for the gas from a massive expansion scheduled to come online in the middle of this decade.
