QatarEnergy Inks The Longest LNG Supply Deal in History

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QatarEnergy has entered into a 27-year deal to supply LNG to China’s state-controlled energy giant Sinopec, LNG Prime.

The second LNG supply deal for the two firms

The state-owned LNG giant would supply 4 million tonnes from the North Field East project, starting in 2026, to Sinopec’s terminals in China, according to a statement by Sinopec released on Monday.

Sinopec said that its chairman, Ma Yongsheng, and Qatar’s energy minister and chief executive of QatarEnergy, Saad Sherida Al-Kaabi, signed the deal during an online ceremony.

This is the second LNG supply deal for the two firms.

In March 2021, QatarEnergy entered into a 10-year LNG deal with Sinopec and these supplies started in January this year.

Longest LNG supply deal in history

Al-Kaabi said in a separate statement released by QatarEnergy that this “is the first long-term SPA from the NFE project to be announced, and marks the longest gas supply agreement in the history of the LNG industry.”

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

QatarEnergy’s unit Qatargas currently has an LNG production capacity of 77 mtpa in the giant Ras Laffan complex.

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

Previously, UK-based Shell, France’s TotalEnergies, Italy’s Eni, and US firms ConocoPhillips and ExxonMobil took stakes in the $28.75 billion NFE project which will boost Qatar’s LNG export capacity by 32 mtpa.

ConocoPhilips, Shell, as well as TotalEnergies took stakes in the smaller NFS project with a capacity of 16 mtpa.

60 LNG carriers

Besides the LNG supply deal, QatarEnergy confirmed in the statement it had also concluded construction contracts and long-term time charter agreements for 60 LNG carriers as part of its giant LNG shipbuilding program in support of both the expansion projects.

South Korea’s three shipbuilders DSME, Hyundai Heavy, Samsung Heavy, as well as China’s Hudong-Zhonghua will build these vessels.

QatarEnergy expects the number to grow to almost 100 LNG carriers in the future, it said.

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Source: LNG Prime

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