QatarEnergy signs LNG deal with Chinese Sinopec

QatarEnergy, the state-owned LNG producer of Qatar, has signed a 27-year LNG supply agreement with China's state-owned energy giant Sinopec, it announced on November 4.

The deal will see QatarEnergy supply 3mn tonnes/year of LNG to Sinopec from the North Field South (NFS) expansion project. The agreement also includes a partnership for the NFS expansion project. This means that Sinopec will take a 5% stake in a joint venture company that owns the equivalent of 6mn tonnes/year of LNG production capacity in the project.

The agreements were signed in Shanghai by Saad Sherida Al-Kaabi, CEO of QatarEnergy, and MA Yong-sheng, the chairman of Sinopec. 

This partnership agreement is the second of its kind with Sinopec, following a similar one signed in Doha last April, which marked Sinopec’s entry as a shareholder in one of the North Field East (NFE) joint venture companies that own the NFE project. 

The long-term LNG supply agreement follows another one signed in November 2022 for the supply of 4mn tonnes/year of LNG over 27 years.

In the past month, QatarEnergy has signed multiple long-term deals. It signed a deal with France's TotalEnergies to supply 3.5mn tonnes/year of LNG with deliveries expected to start in 2026 for a term of 27 years. The company signed another similar deal with Shell for the supply of up to 3.5mn tonnes/year of LNG from Qatar to the Netherlands. Late last month, QatarENergy signed a 27-year deal with Italy's Eni. 

Qatar, the world's largest LNG exporter, held a groundbreaking ceremony on October 3 for the North Field expansion project, which will raise the country's LNG production capacity from 77mn tonnes/year to 126mn tonnes/year by 2026.