QatarEnergy has signed a landmark deal spanning 27 years with China’s Sinopec to provide them with liquefied natural gas (LNG), reported the Qatar News Agency on Monday.
The agreement worth $60 billion is the longest LNG deal struck to date as buyers are seeking long-term contracts amid unstable markets.
As per the agreement, the state-owned petroleum company of Qatar will send China Petroleum and Chemical Corporation (Sinopec) four million tonnes of LNG annually from 2026 onwards.
The deal was signed between Qatar’s energy minister and head of QatarEnergy, Saad al-Kaabi, and Sinopec’s chairman Ma Yongsheng.
“Today is an important milestone for the first sales and purchase agreement (SPA) for North Field East project, it is 4 million tons for 27 years to Sinopec of China,” QatarEnergy chief Saad al-Kaabi told Reuters in Doha, shortly before the deal signing.
“It signifies long-term deals are here and important for both seller and buyer,” he added.
The North Field is part of the world’s biggest gas field that Qatar shares with Iran, which calls its share South Pars.
Earlier this year, QatarEnergy signed five deals for North Field East (NFE) which is the first and larger of the two-phase North Field expansion plan. The project includes six LNG trains that will ramp up Qatar’s liquefaction capacity from 77 million to 126 million tons per annum by 2027.
Monday’s deal, confirmed by Sinopec, is the first supply deal to be announced for NFE.
It is to be noted that countries from across the world, in particular Europe, have been hurrying to secure energy supplies from major producers i.e. Qatar and the US, causing prices to rise greatly.
As per the experts, Qatari and American LNG projects will account for seven out of every 10 new LNG shipments by 2030, and some more countries are also expected to come close in an industry ruled by these two countries.