China will agree on another decades-long liquefied natural gas deal with Qatar in a further move to secure its long-term energy security.
China National Petroleum Corp. will seal a 27-year LNG purchase agreement for 4 million tons annually with QatarEnergy on Tuesday, according to a person with knowledge of the matter. Supply could begin as soon as 2026 and CNPC would take a 5% equity stake in a production train at Qatar’s expansion project in its North Field East, said the person, who asked not to be named as the details are private.
QatarEnergy and CNPC didn’t immediately respond to requests for comment made by Bloomberg News. The Financial Times first reported the deal.
CNPC intended to strengthen energy cooperation with Qatar during chairman Dai Houliang’s visit to the Middle East taking place this week, the company said in a statement earlier Tuesday, without disclosing more details.
The new LNG deal — which would be one of the industry’s longest-ever supply pacts — delivers advantages for both nations. China needs to secure fuel at an affordable rate for decades to come to help meet rising energy demand, while Qatar needs buyers for the gas to be produced from a massive expansion of production scheduled to come online in the middle of this decade.
Qatar is also close to signing additional deals with European buyers, according to the person.
China Petroleum & Chemical Corp., also known as Sinopec, signed a similar 27-year deal with Qatar last year. Sinopec also took a stake in the Qatar expansion project earlier this year.
China is on track to be the world’s largest LNG importer this year, with Shell Plc previously saying that the nation’s demand could nearly double through 2040. Still, China’s increased domestic drilling could abate its hunger for overseas supplies.
(Updates with details throughout.)
