In recent weeks, QatarEnergy has finalized several long-term liquified natural gas (LNG) agreements with major parties in Asian and European markets.
These agreements reflect Qatar’s proactive efforts to secure long-term LNG contracts, capitalizing on increasing concerns about energy security and expanding their portfolio of long-term deals.
Despite being the world’s fifth largest natural gas producer, trailing the United States (U.S.), Russia, Iran, and China, Qatar has maintained its position as the leading exporter of liquefied gas in the past year.
Read more: QatarEnergy and Sinopec unite for largest LNG expansion
Agreements with Sinopec
On November 4th, QatarEnergy entered into two agreements with Sinopec. These agreements entail the Chinese company acquiring a 5 percent stake in a partnership that possesses an annual North Southern LNG production capacity of 6 million tons. As part of the deal, China will receive 3 million tons of ultra-cold fuel annually for a duration of 27 years.
According to a statement from QatarEnergy, the companies have entered into a long-term sale and purchase agreement. This agreement entails the supply of 3 million tons of LNG annually from the North-South field expansion project to China’s Sinopec reception stations over a span of 27 years.
Furthermore, a mutual understanding was reached regarding the allocation of 5 percent ownership in a joint venture enterprise to Sinopec. This collaboration entails an annual LNG production capacity of approximately 6 million tons. Notably, this marks the second agreement of its kind between the parties involved, following Sinopec’s initial entry as a partner in the joint venture responsible for the Northeast Field Development Project in April of last year.
TotalEnergies
On October 11th, QatarEnergy and the prominent French energy company, TotalEnergies, officially inked the first pair of LNG agreements.
Pursuant to these agreements, Qatar has committed to providing France with a maximum annual supply of 3.5 million tons of super-refrigerated fuel for a duration of 27 years.
According to renowned oil expert Anas AlHajji, this transaction signifies Qatar’s longest and most extensive LNG supply to the European market to date.
The country’s LNG supply will be delivered to the Fos Cavaou LNG terminal located in the southern region of France, and the commencement of flow is expected to take place in 2026.
The LNG quantities will be sourced from the joint ventures between QatarEnergy and TotalEnergies, both of which hold stakes in the North-East and North-South field expansion projects.
Last year, TotalEnergies assumed the role of the lead partner in the North Field Expansion Project, making an investment of over $2 billion and securing a 6.25 percent ownership stake.
Unwavering dedication
In reference to the recent agreements with TotalEnergies, Saad Al-Kaabi, the president of Qatar Energy, remarked that these deals underscore Qatar’s unwavering dedication to European markets overall, with a particular focus on the French market. He further highlighted that these collaborations play a pivotal role in enhancing energy security within France.
Upping capacity
During the same month, Qatar forged a bilateral agreement with Italian firm Eni to supply Italy with a maximum of 1 million tons of LNG annually through a long-term contractual arrangement.
Two subsidiaries of QatarEnergy and Shell Energy have recently entered into long-term sales and purchase agreements, facilitating the supply of up to 3.5 million tons of LNG annually from Qatar to the Netherlands.
126 million tons per year
Qatar has set its sights on expanding its LNG production capacity by over 60 percent, aiming to reach 126 million tons per year by the end of the current decade. This ambitious goal will be achieved through the development of the Northeast Field, which is anticipated to kick off operations in 2026, and the North South Field, expected to be ready for export activities by 2027.
Growth projections
According to a report by credit rating agency S&P on Qatar, the country is planning to augment its LNG production capacity by 64 percent, reaching 126 million tons per year by 2027, up from the current 77 million tons. However, the report suggests that significant changes in LPG production are not expected until 2025, with a projected increase of 30 percent in 2026-2027. Qatar is poised to maintain its status as a prominent LNG exporter and retain a robust competitive position even beyond 2030 due to its cost-effective resources.
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