Qatar signs second 27-year gas supply deal with China’s Sinopec

Doha: 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.

Doha will supply three million tonnes of gas a year under the deal, QatarEnergy said, announcing another agreement granting the Chinese oil giant for a further share of Qatar´s North Field gas expansion project.

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

The North Field expansion plan includes six LNG trains that will ramp up Qatar’s liquefaction capacity to 126 million metric tons per year by 2027 from 77 million. The expansion, which broke ground last month, contains the world´s biggest natural gas reserves.

Under the deal inked in Shanghai, QatarEnergy will give Sinopec a five percent interest in a joint venture with a six million tonnes per year capacity in the second phase the expansion, North Field South.

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 four million tonnes of liquified 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.

The first Sinopec deal was succeeded 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 percent of the world´s known natural gas reserves.