By Oyintari Ben
Saad al-Kaabi, the CEO of QatarEnergy, told Reporters on Monday that the company inked the longest-ever liquefied natural gas (LNG) sales and buy agreement with Sinopec of China, lasting 27 years.
Just before the contract was signed, Kaabi gave an interview in Doha and said, “Today is a key milestone for the first sales and purchase agreement for the North Field East project, it is 4 million tonnes for 27 years to Sinopec of China.”
Long-term deals are now possible and significant for both the buyer and the seller, he said.
The North Field is a portion of the largest gas field in the world, which Qatar and Iran both name South Pars.
Early this year, QatarEnergy secured agreements for the first and larger of the two phases of the North Field expansion plan. North Field East would comprise six LNG trains, increasing Qatar’s liquefaction capacity to 126 million tonnes annually by 2027 from 77 million.
The second phase of the development, North Field South, was likewise the subject of contracts later negotiated with partners.
We have a long-standing connection with Sinopec, and this arrangement with them elevates it to new heights because it includes an SPA that will last until the year 2050, said Kaabi.
Kaabi stated that talks were still going on with other purchasers who desire supply security, including those in China, Europe, and other parts of the world.
According to him, the recent volatility has made purchasers realize how important having a long-term supply is.
Kaabi also said that talks with a number of organizations were ongoing for an ownership share in the Gulf nation’s expansion project.
Overall, QatarEnergy has kept a 75% ownership in the expansion and may sell up to 5% of that stake to certain purchasers.
According to sources who spoke to Reuters in June, Qatar and China’s national oil companies are in advanced negotiations to invest in North Field East.