QatarEnergy has signed a 27-year deal to supply China's Sinopec with liquefied natural gas (LNG), the longest such LNG agreement so far as volatile markets drive buyers to seek long-term deals.
Following 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% of the continent's imports.
"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," QatarEnergy chief Saad al-Kaabi told Reuters in Doha, shortly before the deal signing.
"It signifies long-term deals are here and important for both seller and buyer," he said.
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.
"We are very happy about this deal with Sinopec because we have had a long-term relationship in the past and this takes our relationship to new heights as we have an SPA that will last into the 2050s," Kaabi said.
