Qatar announces 27-year agreement with China as competition for LNG ramps up

Qatar announces 27-year agreement with China as competition for LNG ramps up.

 

QatarEnergy has signed a 27-year contract to supply liquefied natural gas (LNG) to China’s Sinopec, the longest such LNG agreement so far as volatile markets drive buyers to seek long-term deals.

 

Following Russia’s invasion of Ukraine in February, competition for LNG has become fierce, with Europe in particular in desperate need of large quantities to help replace Russian pipeline gas, which used to account for nearly 40% of the continent’s imports.

 

‘Today is a big milestone for the first sales and purchase agreement (SPA) for the North Field East project, which is 4 million tonnes for 27 years to Sinopec of China,’ QatarEnergy head Saad al-Kaabi told Reuters in Doha, soon before the pact was signed.

 

‘It indicates that long-term deals are here, which is crucial for both the seller and the buyer,’ he said.

 

The North Field is part of the world’s largest gas field, which Qatar shares with Iran, which refers to their portion as the South Pars.