Qatar supplies gas to China for 27 years

State-owned energy company QatarEnergy will supply liquefied natural gas (LNG) to China's state-owned utility Sinopec for the next 27 years. It is the longest term ever agreed for an LNG supply contract, the head of QatarEnergy, Saad al-Kaabi, cheered on Monday.

Qatar is among the world's top five gas producers and is currently exploiting the world's largest natural gas field, North Field, in the Persian Gulf. In view of the skyrocketing gas prices, Qatar has decided to rely even more on fossil energies than before and to significantly expand natural gas production. The "North Field East" project requires billions of dollars in investments, which Qatar wants to recover from its customers through long-term supply contracts.

The North Field is part of the world’s biggest gas field that Qatar shares with Iran, which calls its share South Pars. QatarEnergy earlier this year signed deals for North Field East, the first and larger phase of the two-phase North Field expansion plan, which includes six LNG trains that will ramp up Qatar’s liquefaction capacity to 126 million tonnes per year by 2027 from 77 million.

"We are delivering 4 million tonnes per year over a 27-year period - this is a milestone for our North Field East project," al-Kaabi said. China apparently has no problem committing to fossil fuels from Qatar over this long period. 

In spring, Germany's Economics Minister Robert Habeck tried to get hold of liquefied natural gas from Qatar within the framework of an energy partnership, but was rebuffed. Since Qatar relies on long-term contracts and also prohibits customers from reselling the LNG, no agreement was reached. Instead, Germany now buys most of its LNG from the USA.