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A liquefied natural gas carrier is berthed at Sinopec’s Tianjin LNG receiving station for unloading operations on October 21, 2022. Photo: Xinhua
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China’s Sinopec signs second 27-year natural gas supply deal with Qatar as it seeks to shore up energy security

  • Doha will supply 3 million tonnes of natural gas a year under the deal, QatarEnergy said
  • The deal is the second with QatarEnergy as China aims to plug holes in its energy security strategy
Energy
Agence France-Presse
Agence France-Presse
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Qatar has agreed to supply Sinopec with natural gas for 27 years, the Gulf emirate’s state-owned energy company said Saturday, its second such deal with the Chinese firm as China seeks to enhance its energy security.

Doha will supply 3 million tonnes of gas a year under the deal, QatarEnergy said, announcing another agreement, which grants the Chinese oil giant a further share of Qatar’s North Field gas expansion project.

The expansion, which broke ground last month, contains the world’s biggest natural gas reserves and extends under the Gulf into Iranian territory.

Under the deal signed in Shanghai, QatarEnergy will give Sinopec a 5 per cent interest in a joint venture with a 6 million tonnes per year capacity in the second phase of the expansion, North Field South.

Signage for China Petroleum and Chemical Corp (Sinopec) is seen at a gas station in Hong Kong on March 25, 2023. Photo: Bloomberg

Asian countries led by China, Japan and South Korea are the main market for Qatar’s gas, which has been increasingly sought by European countries since Russia’s invasion of Ukraine early last year.

In April, state-owned Sinopec became the first Asian firm to secure a stake in the Qatari expansion’s first phase, North Field East.

In 2022 the Chinese firm signed a 27-year supply deal with Qatar for 4 million tonnes of liquefied natural gas (LNG) annually, which at the time was the longest in the industry.

“These historic milestones are a testament to the excellent bilateral relations between the People’s Republic of China and the state of Qatar as well as between Sinopec and QatarEnergy,” the Gulf firm said in a statement.

China is looking to plug holes in its power system as it scrambles to shore up energy security – including in oil, natural gas and power supply networks.

The first Sinopec deal was followed by a flurry of similar 27-year agreements with France’s Total, Britain’s Shell and Italy’s Eni, all announced in recent weeks.

In June this year, Qatar also announced a 27-year supply deal with the China National Petroleum Corporation.

US giants ConocoPhillips and ExxonMobil have also signed deals to partner in the expansion.

Qatar is one of the world’s top LNG producers, alongside the United States, Australia and Russia.

QatarEnergy estimates the North Field holds about 10 per cent of the world’s known natural gas reserves.

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