London Daily

Focus on the big picture.
Sunday, Jun 01, 2025

China signs 27-year gas deal with QatarEnergy to secure supply

China signs 27-year gas deal with QatarEnergy to secure supply

Since Russia’s invasion of Ukraine, competition for LNG has become intense with nations trying to replace Russian supply.

QatarEnergy has signed a 27-year deal to supply China’s Sinopec with liquefied natural gas (LNG) in the longest such agreement to date, as volatility drives buyers to seek long-term supplies.

Since Russia’s invasion of Ukraine in February, competition for LNG has become intense, with Europe, in particular, needing vast amounts to help replace Russian pipeline gas that used to make up almost 40 percent of the continent’s imports.

European companies looking to buy LNG needed to look at how Asian buyers were approaching their own negotiations and were willing to lock into long-term deals, QatarEnergy chief Saad al-Kaabi told the Reuters news agency shortly before signing the Sinopec deal.

“Today is an important milestone for the first sales and purchase agreement (SPA) for North Field East project, it is 4 million tonnes for 27 years to Sinopec of China,” al-Kaabi said.

“It signifies long-term deals are here and important for both seller and buyer,” he said in an interview in Doha, adding that the deal was the LNG sector’s largest single sales and purchase agreement on record.

The North Field is part of the world’s biggest gas field that Qatar shares with Iran, which calls its share South Pars.

QatarEnergy earlier this year signed five deals for North Field East (NFE), the first and larger of the two-phase North Field expansion plan, which includes six LNG trains that will ramp up Qatar’s liquefaction capacity to 126 million tonnes per year by 2027 from 77 million.

It later signed contracts with three partners for North Field South (NFS), the second phase of the expansion.

Monday’s deal, confirmed by Sinopec, is the first supply deal to be announced for NFE.

“This takes our relationship to new heights as we have an SPA that will last into the 2050s,” al-Kaabi said.

“It sends a message that a lot of Asian buyers are actually approaching us to have a long-term deal because they see the volumes of gas that are coming in the future are less and less.”


Long-term supply


al-Kaabi said negotiations with other buyers in China and Europe who want to have supply security were ongoing.

Qatar is already the world’s top LNG exporter, and its North Field expansion project will boost that position and help guarantee long-term supplies of gas to Europe as the continent seeks alternatives to Russian flows.

“The recent volatility has driven buyers to understand the importance of having long-term supply that is fixed and that’s reasonably priced for the long term,” al-Kaabi said.

“There aren’t many projects that are taking final investment decision and the next two big chunks of LNG capacity that are coming into the market is Golden Pass LNG that we partnered with ExxonMobil in Texas and the next big chunk if you will is North Field East and North Field South.”

al-Kaabi also said there was more realisation globally that gas should be an essential part of any energy transition.

“The wind doesn’t blow all the time and the sun doesn’t shine all the time,” he said, adding that Qatari LNG is “a solution that has the least carbon intensity”.

The pricing of the Sinopec deal will be similar to others in the past that were linked to crude oil.

“The way we’re pricing our deals with Asia is crude linked. We’ve done it this way in the past and that’s the mechanism we’re using going forward.”

The deal was signed on an ex-ship basis, meaning QatarEnergy will provide the shipping and delivery of the LNG.

al-Kaabi added negotiations for an equity stake in the Gulf country’s expansion project were ongoing with several entities.

The supply contract is a key component for an integrated partnership in the NFE, Sinopec said in a statement, indicating it could be involved in stake negotiations.

QatarEnergy has maintained a 75 percent stake overall in the expansion and could give up to a 5 percent stake from its holding to some buyers, al-Kaabi said.

“Important buyers that want to commit for the long term on a substantial volume want to see part of the benefits of the upstream business … so I think it’s an important win if you will and it makes the partnership even more solid.”

Newsletter

Related Articles

0:00
0:00
Close
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
×