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QatarEnergy signs long-term LNG deal with CNPC

Saad Al-Kaabi, CEO of QatarEnergy, and Dai Houliang, chairman of CNPC, signing the agreements in Doha
  • State player’s second LNG deal with a Chinese company
  • CNPC hails ‘another milestone’ in trade relationship
  • Deal also includes stake in North Field LNG project

State-owned QatarEnergy has signed its second long-term liquefied natural gas (LNG) supply agreement with a Chinese government-owned energy company.

Under the 27-year supply agreement, China National Petroleum Corporation (CNPC) will purchase four million metric tons of LNG a year from the Gulf nation.

In addition, CNPC will take a five percent equity stake in one of the North Field East (NFE) units with a capacity of 8 million tonnes per annum, QatarEnergy said.

The transfer will not impact the interests of any of the other shareholders in the project. The NFE expansion project is estimated to cost $30 billion.

“Today we are signing two agreements that will further enhance our relations with one of the most important gas markets in the world and a key market for Qatari energy products,” Saad Al Kaabi, CEO of QatarEnergy, said, terming CNPC as a “valuable partner in the NFE project”.

“These agreements demonstrate our shared ambition for a sustainable future facilitated by a cleaner and more eco-friendly energy source that would catalyse substantial socio-economic development.”

Dai Houliang, chairman of CNPC, called the agreements “another milestone” in forming a strategic synergy between China’s Belt and Road Initiative and Qatar’s National Vision 2030.

“It lays a solid foundation for the energy cooperation between the two sides in the next three decades.”

CNPC will continue actively discussing with QatarEnergy all-round cooperation across the hydrocarbon industry chain and other areas like green and low carbon energies to build a long-term and multi-dimensional strategic partnership, Houliang added.

QatarEnergy in April said that state-owned China Petrochemical Corporation (Sinopec) will acquire part of the NFE expansion project.

The Chinese firm will take a five percent stake in the equivalent of one North Field East LNG units with an annual capacity of eight million tonnes.

Sinopec in November also signed a deal in which QatarEnergy agreed to supply four million tonnes of LNG annually for 27 years.

QatarEnergy has announced plans to retain a 75 percent stake in the North Field expansion.

The Qatar Investment Authority (QIA), the country’s $445 billion sovereign wealth fund, will manage most of the revenues from the North Field expansion, Reuters reported Al Kaabi as saying.

“I think the majority of the revenue of what’s going to come from this North Field expansion will go into a future generation wealth fund in QIA, making sure that the Qatari people and people living in Qatar are well taken care of,” he added.