DOHA: QatarEnergy announced a 27-year natural gas supply deal with China on Monday, calling it the “longest” ever seen as it strengthened ties with Asia while Europe scrambles for alternative sources.

The state energy company will send four million tonnes of liquefied natural gas annually from its new North Field East project to China Petroleum and Chemical Corporation (Sinopec), it said.

The deal “marks the longest gas supply agreement in the history of the LNG industry”, said Saad Sherida al-Kaabi, Qatar’s energy minister and QatarEnergy’s chief executive.

Asian countries led by China, Japan and South Korea are the main market for Qatar’s gas, which is increasingly being sought by European countries since Russia’s invasion of Ukraine.

Negotiations with European countries have struggled as Germany and others baulked at signing the type of long-term deals made with Asian nations.

North Field is at the centre of Qatar’s expansion of its liquefied natural gas production by more than 60 percent to 126 million tonnes a year by 2027.

“QatarEnergy has a lot of LNG to market... but they’re very confident about demand,” Ben Cahill, a senior fellow at the Washington-based Centre for Strategic and International Studies think-tank, told AFP.

“And in this market, with buyers worried about energy security and trying to lock up volumes from mid-decade on, there’s no need for QatarEnergy to settle for anything but long-term contracts.” China is the first country to seal a deal for North Field East.

The Chinese company’s chairman revealed it had also requested a full share of the North Field South project that is dominated by Western energy giants.

The accord would “further solidify the excellent bilateral relations between the People’s Republic of China and the State of Qatar and help meet China’s growing energy needs”, Kaabi said.

Sinopec chairman Ma Yongsheng, who took part in a virtual signing ceremony from Beijing, said it was a “milestone” accord as “Qatar is the world’s largest LNG supplier and China is the world’s largest LNG importer”.

He told the ceremony that he had “formally” requested in October last year a share of Qatar’s North Field South project. TotalEnergies of France, Shell of Britain and US giant ConocoPhillips will share the 25 percent foreign stake in the field.

“Thank you for taking it into serious consideration,” Ma told Kaabi at the ceremony, adding that Sinopec wanted to explore other potential deals with QatarEnergy.­

Published in Dawn, November 22nd, 2022