The multi-billion North Field expansion project is the largest of its kind and is leading Qatar’s drive to dominate global supplies.
QatarEnergy and China National Petroleum Corp (CNPC) have edged closer to finalising a nearly 30-year liquified natural gas (LNG) deal from the Gulf state’s major North Field expansion project, sources told Reuters on Monday.
“CNPC has agreed on the major terms with Qatar in a deal that will be very similar to Sinopec’s,” a Beijing-based state-oil official told the news agency.
While both QatarEnergy and CNPC did not comment on the matter, the deal would be the second of its kind between the Gulf state and China, the world’s second-top LNG buyer.
The reported deal would follow an earlier one both that was signed in November last year between QatarEnergy and China’s Sinopec.
Under the previous deal, the Gulf state’s company agreed to provide China with an annual amount of four million tonnes of LNG over the span of 27 years.
This also represented the longest deal ever signed by QatarEnergy and in the industry’s history.
Speaking to the press in Doha at the time, Qatar’s Minister of State for Energy Affairs Saad Sherida Al-Kaabi said this is also the first long-term agreement from the mega LNG project to be announced.
Last year, China’s LNG imports from Qatar spiked by 75% from 2021, amounting to 15.7 million tonnes of the gas. The figure, shared by Chinese customs, amounts to a quarter of China’s total imports.
The agreement also adds to other long-term LNG deals that Qatar has with other Asian buyers.
It is also follows an earlier deal between QatarEnergy and Sinopec following a previous 10-year SPA signed in 2021 over the supply of two million tonnes per annum of LNG.
Commenting on the potential deal, another Beijing-based state gas official told Reuters that CNPC and Sinopec would not choose such a long-term agreement without acquiring small stakes in the LNG project’s export facility.
The multi-billion North Field expansion project is the largest of its kind and is leading Qatar’s drive to dominate LNG supplies.
The project is broken into two parts, the North Field East (NFE) and the North Field South (NFS).
The first is set to ramp up Qatar’s production from 77 to 110 million tonnes per annum as the NFS will increase the production capacity from 110 to 126 million tonnes per annum.
QatarEnergy announced eight international partnership agreements last year for both phases of the projects, set to kick start in 2026 and 2027.
As a conflict between Russia and Ukraine kicked off last year, Qatar became a major player for European countries seeking to ditch Moscow’s gas. Countries including Germany, Italy and Hungary reached out to the Gulf state in an effort to secure gas supply.