QatarEnergy chief Saad al-Kaabi told Reuters on Monday that the company has signed a 27-year sales and purchase agreement with China’s Sinopec, the longest in the history of liquefied natural gas (LNG) deals.
“Today is an important milestone for the first sale and purchase agreement for the North Field East project, it is 4 million tons for 27 years to Sinopec in China,” Kaabi said during an interview in Doha shortly before the deal was signed .
“It means there are long-term agreements that are important to both the seller and the buyer,” he said.
The North Field is part of the world’s largest gas field that Qatar shares with Iran, which calls its share South Pars.
QatarEnergy earlier this year signed agreements for North Field East, the first and larger phase of the two-phase North Field expansion plan, which includes six LNG trains that will increase Qatar’s liquefaction capacity from 77 million to 126 million tons per annum by 2027.
It later also signed contracts with partners for North Field South, the second phase of the expansion.
“We are very pleased with this deal with Sinopec as we have had a long term relationship in the past and this takes our relationship to new heights as we have a SPA that will last into the 2050s,” said Kaabi.
Kaabi said negotiations are underway with other buyers in China and Europe and who want security of supply globally.
“I think the recent volatility has made buyers realize the importance of long-term delivery,” he said.
Kaabi also added that negotiations were underway with several entities for an equity stake in the Gulf country expansion project.
QatarEnergy has retained an overall 75% stake in the expansion and could give up to 5% of that stake to some buyers.
Sources told Reuters in June that China’s national oil companies were in advanced talks with Qatar to invest in North Field East.