China agreed to another decades-old liquefied natural gas deal with Qatar in a new move to safeguard its energy security.
China National Petroleum Corp. signed a 27-year LNG purchase agreement for 4 million tons per year with QatarEnergy on Tuesday. Supply will begin in 2026 and CNPC will take a 5% stake in a production train at Qatar’s North Field East expansion project, the country’s energy minister and head of QatarEnergy Saad al-Kaabi said at a ceremony of signature in Doha.
CNPC is looking to strengthen energy cooperation with Qatar during President Dai Houliang’s visit to the Middle East this week. China is on track to be the world’s biggest LNG importer this year, and Shell Plc says the country’s demand could nearly double by 2040.
The new LNG deal, one of the industry’s longest supply pacts, offers benefits for both nations. China needs to secure fuel at an affordable rate to meet growing energy demand, while Qatar needs buyers for gas from a massive expansion scheduled to come online in the middle of this decade.
China Petroleum & Chemical Corp., also known as Sinopec, signed a similar 27-year deal with Qatar last year. Sinopec also took a stake in the Qatar expansion project earlier this year. At the signing ceremony in April, Kaabi said QatarEnergy was “prioritizing China’s long-term strategic partners”.
Qatar is also close to signing additional deals with buyers in France, Italy and the United Kingdom, Kaabi said. Qatar has sent less LNG to Europe this year after ending its pledge to avoid diverting cargo it was contractually allowed to send elsewhere. The pledge was made to help the gas-strapped continent following Russia’s invasion of Ukraine.
–With assistance from Walid Ahmed and Verity Ratcliffe.
