DOHA – In a significant energy agreement, the State of Qatar has entered into a 27-year natural gas supply contract with the Chinese conglomerate Sinopec, marking the second such deal between the two parties.
Under the terms of this groundbreaking agreement, Doha’s state-owned energy company, QatarEnergy, is set to provide three million tonnes of natural gas annually. This pact coincides with the announcement of another pivotal collaboration granting Sinopec a significant stake in Qatar’s North Field gas expansion project, one of the world’s largest natural gas reserves.
The extensive expansion initiative, which recently broke ground, encompasses an extraordinary expanse of natural gas deposits, extending beneath the Gulf region into Iranian territory. This strategic move is expected to have far-reaching implications for the global energy landscape.
As part of the agreement, QatarEnergy will confer a five percent ownership interest to Sinopec within a joint venture. This venture is geared toward expanding the North Field South’s capacity to six million tonnes annually during its second phase.
The primary beneficiaries of Qatar’s substantial natural gas exports have traditionally been Asian nations, including China, Japan, and South Korea. Recently, European countries have displayed an increased interest in Qatar’s gas, driven by geopolitical factors such as Russia’s incursion into Ukraine early last year.
In a landmark development, Sinopec, a Chinese state-owned enterprise, became the first Asian entity to secure a stake in the initial phase of the Qatari expansion, known as North Field East, earlier this year.
Building upon this trend of long-term energy partnerships, 2022 witnessed the Chinese firm signing a historic 27-year supply agreement with Qatar, encompassing four million tonnes of liquefied natural gas (LNG) annually, distinguishing it as one of the most extended contracts in the industry.
QatarEnergy expressed that these groundbreaking agreements underscore the exceptional diplomatic relations between the People’s Republic of China and the State of Qatar, as well as the strong rapport between Sinopec and QatarEnergy. This signifies a milestone in the burgeoning energy ties between these two global entities.
The initial Sinopec contract set in motion a series of similar 27-year deals with international energy giants, including France’s Total, Britain’s Shell, and Italy’s Eni, all of which were announced in recent weeks. Further bolstering these collaborations, Qatar recently secured a 27-year supply agreement with the China National Petroleum Corporation.
Additionally, United States energy giants, ConocoPhillips and ExxonMobil, have also made strategic moves to become pivotal partners in Qatar’s ambitious expansion initiatives.
Qatar is globally recognized as one of the premier liquefied natural gas (LNG) producers, rivaling major players such as the United States, Australia, and Russia. The North Field, located off the coast of Qatar, is estimated to hold approximately 10 percent of the world’s known natural gas reserves.
This momentous agreement reaffirms Qatar’s commitment to playing a pivotal role in the international energy arena while strengthening its bonds with key global partners.
For further insights and developments in this significant energy collaboration, refer to AFP’s report.