Natural gas: Qatar agrees with a Chinese state-owned company with a 27-year contract
The China National Petroleum Corporation (CNPC) and QatarEnergy are expected to sign a 27-year deal that will allow China to purchase 4 million metric tons of liquefied natural gas (LNG) annually, Reuters reported on Tuesday .
Sources familiar with the deal confirmed to Reuters that CNPC will also take a stake in the eastern expansion of Qatar's North Field LNG project. The stake is equivalent to 5% of an LNG train with a capacity of 8 million tons per year.
Despite selling ownership stakes in the North Field expansion to foreign companies, QatarEnergy intends to retain a 75 percent stake in the project, which will cost at least $30 billion, including the construction of facilities to export the liquefaction.
In April, China's Sinopec signed an agreement to become a "value-added" partner in Qatar's North Field expansion project. So Chinese interest in Qatari resources is not just occasional.
The project, with a total investment of US$28.75 billion, aims to increase Qatar's LNG export capacity from its current 77 million metric tons per year (MTPA) to 110 MTPA, making it one of the largest LNG to the world, Sinopec said in a statement.
“The cooperation will help Sinopec optimize China's energy consumption mix and ensure the nation a long-term and reliable supply of clean energy. The partnership represents another model of bilateral cooperation between China and Qatar,” Sinopec said.
China is trying to increase LNG imports from Qatar, the world's leading LNG supplier, also to reduce its dependence on LNG imports from the United States, the world's second largest supplier, which does not always appear particularly favorable to China.
Some US lawmakers have highlighted China's dependence on US-produced LNG as an opportunity to exert influence over the nation with the world's second-largest economy.
“If we want to think of it in geopolitical terms, why wouldn't we want China to depend on our natural gas for its economy?” House Speaker Kevin McCarthy said in an interview reported by Politico. “Wouldn't the world be safer and we wouldn't be stronger? Why shouldn't we create more American jobs at the same time?”
However, Louisiana Senator Bill Cassidy explained that Chinese purchases of US-produced LNG are mutually beneficial, saying “China gets guaranteed shipments at a certain price by providing seed capital. This, in turn, helps US companies build export terminals, which drives demand for more US drilling in places like Louisiana and Texas.
“Right now, China is an enemy,” he added. “If they – as well as India, South Korea, Japan, the EU – buy or buy, helping to pay for the capitalization of LNG export terminals, well, that's a good thing.”
Competition for LNG has intensified since the war began in Ukraine in February 2022. Europe needs new sources of natural gas to replace gas from Russian pipelines which made up nearly 40% of the continent's imports. Europe cut off its supplies of Russian gas by imposing sanctions against Moscow after the war started.
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The article Natural Gas: Qatar agrees with a Chinese state-owned company with a 27-year contract comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/gas-naturale-il-qatar-si-accorda-con-societa-statale-cinese-con-contratto-lungo-27-anni/ on Wed, 21 Jun 2023 09:00:56 +0000.