China's CNPC set to strike 30-year LNG deal with Qatar


China National Petroleum Corp (CNPC) is close to finalizing an agreement to purchase liquefied natural gas (LNG) from QatarEnergy for up to 30 years from the Middle Eastern exporter's massive North Field expansion project, three people with knowledge of the matter said.

The talks between CNPC and QatarEnergy follow an agreement revealed by China's Sinopec in November in which QatarEnergy promised to deliver 4 million tonnes of LNG yearly for 27 years, the longest duration LNG supply contract ever signed by Qatar.

"This is a good move for CNPC, securing additional long term supply from a reliable and well positioned partner. This will further insulate from market volatility, diversify supply while optimising between the state owned units," said Toby Copson, global head of trading at Trident LNG.

Wei Xiong, analyst at Rystad Energy, said although CNPC dominates China’s piped gas imports, it still needs other import options to mitigate any potential risk, in line with China’s energy policy on supply diversification. Therefore, the deal will eventually strengthen the energy giant’s competitiveness.

If completed, this would be the second such agreement between Qatar, the world's largest LNG exporter, and China, the world's second largest LNG importer, as Beijing seeks to increase gas supply and diversify its sources in an effort to replace coal and reduce carbon emissions.

China’s expanding natural gas imports

The Energy Information Administration (EIA) reports that during the past ten years, China has gradually increased its consumption of natural gas. China has become the second-largest consumer of natural gas as its economy grows and the fact that natural gas emits carbon dioxide at a rate that is between 50% and 60% lower than coal.

As relations between Beijing and Qatar's two main LNG export rivals, the United States and Australia, deteriorate, Chinese national energy businesses increasingly regard Qatar as a safer destination for resource investment.

QatarEnergy inked five contracts with international giants last year for the North Field project, a two-phase expansion plan that will increase Qatar's liquefaction capacity to 126 million tonnes per year by 2027 from 77 million tonnes now.


Australian solar firm Vast merges with Nabors SPAC
Germany eyes long-term LNG supply deal with Oman
Download request

Please fill out the form to download samples.

Job title
Company email
By using this site, you agree with our use of cookies.