Qatar Petroleum (QP) has signed a long-term agreement with a subsidiary of China National Offshore Oil Corporation (CNOOC) to supply China with liquefied natural gas.
The Qatari giant on Wednesday said that the sale and purchase agreement (SPA) aims to supply 3.5 million tonnes per annum of LNG to the Chinese player over a 15-year period, starting in January next year.
The company added that its relationship with CNOOC dates back to September 2009 “when the first LNG cargo was delivered to CNOOC in China”.
It added that, since August 2021, Qatar has delivered 715 LNG cargoes to China, of which 270 cargoes —accounting for more than 24 million tonnes of LNG — were delivered to CNOOC.
The long-term LNG supply deal comes at a time when global gas prices are scaling new highs and several nations are facing a massive supply crunch.
Long-term deals
The deal is one of a series of SPAs Qatar has signed in recent months as it moves ahead swiftly on the huge expansion of its giant North Field.
It recently signed a long-term SPA to supply Taiwan’s CPC with 1.25 million tpa of LNG over a 15-year period.
In addition, QP signed a deal with Shell to supply 1 million tpa of LNG to mainland China over a 10-year term.
Earlier this year, QP signed a separate long-term SPA to supply LNG to China’s state-owned oil giant Sinopec.
North field expansion
Qatar Petroleum chief executive Saad Sherida al-Kaabi said this year that QP has “received offtake commitments/SPAs for double the 32 million tpa volume on offer” as part of the first expansion phase of North Field.
This project phase — named North Field East — is valued at $28.75 billion and aims to ramp up liquefaction capacity to 110 million tpa by the middle of this decade from the current nameplate capacity of 77 million tpa.
QP aims to take the final investment decision potentially this year on the second expansion phase, North Field South, which is likely to boost national liquefaction capacity to 126 million tpa.
North Field South will probably include two additional mega-trains — of 8 million tpa capacity apiece — and associated offshore and onshore facilities.
QP is evaluating the expansion of North Field beyond 126 million tpa but has yet to define timelines for further increasing output.
