Qatar’s state-owned petroleum company, Qatar Petroleum (QP) has entered into a long-term Sale and Purchase Agreement (SPA) with the British-Dutch oil and gas giant, Shell for the supply of 1 million tonnes per annum (MTPA) of liquefied natural gas (LNG) to China for 10 years.
Under the latest deal with Shell, LNG deliveries will commence in January 2022 to various LNG terminals in China. The East Asian country is set to become the world’s largest LNG importer this year.
“We are pleased to enter into this new LNG SPA with our trusted partner, Shell. I am especially delighted that this agreement will meet part of the demand of Shell’s end customers in China, thereby further supplementing Qatar’s contribution to meeting China’s growing energy needs. This SPA further highlights our ability to meet the requirements of our customers and partners across the world. I would like to take this opportunity to thank the management and staff of Shell for the successful conclusion of this SPA, which is another testament to our long and fruitful partnership.”
As part of the deal with Shell, the deliveries will come from the Qatargas 1 project. QP operates the 10 million t/y joint venture (JV) project with TotalEnergies, ExxonMobil, as well as Japanese companies Marubeni and Mitsui. QP will be 100 percent owner of Qatargas 1 at the start of next year when its JV agreement with its partners expires.
China is considered a major customer and strategic partner in the energy sector. With the conclusion of this agreement, China will be supplied with approximately 12MPTA of LNG under long-term SPAs from Qatar.
In April, China National Offshore Oil Corporation (CNOOC), China’s third-biggest oil company, signaled its interest to become a partner in Qatar’s $29 billion North Field LNG expansion project, which will be the world’s largest.