Two informed sources revealed to Reuters today, Tuesday, that Qatar is set to sign its second major gas supply agreement with a state-controlled Chinese company in less than a year. It is expected that the China National Petroleum Corporation and QatarEnergy will sign a 27-year agreement today, under which China will purchase four million tons of liquefied natural gas (LNG) annually from Qatar, according to the sources.
The sources stated that the Chinese petroleum corporation will also acquire a stake in the eastern expansion of the North Field LNG project. One source explained that the stake represents five percent of a single LNG unit with a capacity of eight million tons per year.
Today’s agreement, which was first reported by the Financial Times, will be the third agreement for QatarEnergy to supply LNG from the expansion project to an Asian buyer. Qatar is the world's largest exporter of LNG, and competition for LNG has increased since the onset of the Ukraine war, as Europe, in particular, needs vast amounts to help replace Russian gas, which accounted for nearly 40 percent of the continent's imports.
Earlier, Reuters reported that the Chinese corporation is close to finalizing a deal to purchase LNG from QatarEnergy over nearly 30 years from the North Field expansion project. QatarEnergy had previously announced that it might sell up to five percent of its stakes in gas units related to the North Field expansion to what Saad al-Kaabi, Minister of Energy and CEO of QatarEnergy, described as "partners who represent added value."
In April, Chinese company Sinopec became the first Asian energy firm to partner in the project. QatarEnergy has also signed agreements to sell stakes in the project to global oil companies, but it stated that it intends to retain a 75 percent stake in the North Field expansion project, which will cost at least $30 billion, including the construction of LNG export facilities.
With strained relations between China and the United States and Australia, Qatar’s biggest competitors in the LNG export market, Chinese national energy companies view Qatar as the safest investment destination for resources.
