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Qatar signs second 27-year gas supply deal with China’s Sinopec

DOHA (AFP) – Qatar has agreed to supply Sinopec with natural gas for 27 years, the Gulf emirate’s state-owned energy company said on Saturday, its second such deal with the Chinese firm.

Doha will supply three million tonnes of gas a year under the deal, QatarEnergy said, announcing another agreement granting the Chinese oil giant for a further share of Qatar’s North Field gas expansion project.

The expansion, which broke ground last month, contains the world’s biggest natural gas reserves and extends under the Gulf into Iranian territory.

Under the deal inked in Shanghai, QatarEnergy will give Sinopec a five per cent interest in a joint venture with a six million tonnes per year capacity in the second phase of the expansion, North Field South.

Asian countries led by China, Japan and South Korea are the main market for Qatar’s gas, which has been increasingly sought by European countries since the beginning of the war in Ukraine early last year.

Staff members oversee the product loading process at a dock of Sinopec Chongqing SVW Chemical Co Ltd in southwest China’s Chongqing. PHOTO: XINHUA

In April, state-owned Sinopec became the first Asian firm to secure a stake in the Qatari expansion’s first phase, North Field East.

In 2022 the Chinese firm signed a 27-year supply deal with Qatar for four million tonnes of liquified natural gas (LNG) annually, which at the time was the longest in the industry.

“These historic milestones are a testament to the excellent bilateral relations between China and Qatar as well as between Sinopec and QatarEnergy,” the Gulf firm said in a statement.

The first Sinopec deal was succeeded by a flurry of similar 27-year agreements with France’s Total, Britain’s Shell and Italy’s Eni, all announced in recent weeks.

In June this year, Qatar also announced a 27-year supply deal with the China National Petroleum Corporation.

United States (US) giants ConocoPhillips and ExxonMobil have also signed deals to partner in the expansion.

Qatar is one of the world’s top LNG producers, alongside the US, Australia and Russia.

QatarEnergy estimates the North Field holds about 10 per cent of the world’s known natural gas reserves.