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 search for long deals, reports Reuters.
After Russia's invasion of Ukraine in February, competition for LNG has become intense, with Europe needing to replace Russian pipeline gas that used to make up 40 per cent 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 four million tonnes for 27 years to Sinopec of China," said QatarEnergy chief Saad al-Kaabi.
"It signifies long-term deals are here and important for both seller and buyer."
The North Field is part of the world's biggest gas field that Qatar shares with Iran, which calls its share South Pars.
QatarEnergy signed five deals for North Field East (NFE), including six LNG trains that will ramp up Qatar's liquefaction capacity to 126 million tonnes per year by 2027 from 77 million.
It also signed contracts with three partners for North Field South (NFS), the second phase of the expansion.
"This takes our relationship to new heights as we have an SPA that will last into the 2050s," said Mr Kaabi.
Mr Kaabi declared negotiations with other buyers in China and Europe who want to have supply security were ongoing.
"I think the recent volatility has driven buyers to understand the importance of having long-term supply that is fixed and that's reasonably priced for the long term," said Mr Kaabi.
Mr Kaabi stated the deal's pricing would be similar to others in the past.
"The way we're pricing our deals with Asia is crude linked. We've done it this way in the past, and that's the mechanism we're using going forward."
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