Qatar and China sign 27-year LNG supply deal

November 21, 2022, by Ajsa Habibic

QatarEnergy and China Petroleum & Chemical Corporation (Sinopec) have entered into a 27-year sale and purchase agreement (SPA) for the supply of 4 million tons per annum (mtpa) of liquefied natural gas (LNG) to China.

The contracted LNG volumes will be supplied from QatarEnergy’s North Filed East (NFE) LNG expansion project and will be delivered to Sinopec’s receiving terminals in China.

Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, the President and CEO of QatarEnergy, said that the agreement will further solidify bilateral relations between Qatar and China highlighting that it is the first long-term SPA from the NFE project to be announced.

He also added that this marks the longest gas supply agreement in the history of the LNG industry.

MA Yongsheng, the Chairman of Sinopec, commented: “The signing of the long-term LNG SPA with QatarEnergy is a milestone and an important part of the integrated cooperation between the two sides on the NFE project.”

The agreement is the second LNG SPA between QatarEnergy and Sinopec, following the 10-year SPA signed in March 2021 for the supply of 2 mtpa to China.

It comes on the heels of QatarEnergy’s conclusion of the formation of eight international partnership agreements for the North Field East and North Field South (NFS) projects, which are expected to come online in 2026 and 2027, respectively.

Together, NFE and NFS form the wider North Field Expansion project to increase LNG production from the North Field, adding 48 Mtpa to Qatar’s export capacity and bringing it to 126 Mtpa by 2028.

QatarEnergy has also concluded construction contracts and long-term time charter agreements for 60 LNG carriers as part of its historic LNG shipbuilding program in support of both the NFE and NFS expansion projects, with the number expected to grow to almost 100 in the future.