How the Chinese of Sinopec reach out to Qatar’s LNG
After the mega-contract on LNG, the Chinese Sinopec enters directly into the North Field expansion project in Qatar, alongside Eni, Total, Shell and others. All the details
China's state-owned oil company Sinopec will acquire a 5 percent stake in one of the gas liquefaction trains of North Field East LNG, the expansion plan of the major North Field project in Qatar.
QatarEnergy, the Qatari state energy company, specified that the liquefaction unit (“train”, in slang) owned by Sinopec has a capacity of 8 million tons per year.
North Field is the name of the Qatari portion of one of the largest natural gas fields in the world, which the country shares with Iran: the Iranian section of the field is called South Pars.
ALL THE COMPANIES INVOLVED IN THE NORTH FIELD (INCLUDING ENI)
QatarEnergy had already anticipated some time ago that it would sell up to 5 percent of the shares in the eastern expansion plan of North Field to "value-added partners". Sinopec is the first Asian company to take part in the project, in which Western companies are already involved such as the French TotalEnergies (it has 25 percent, more than all the others), the US ExxonMobil and ConocoPhillips, the British Shell and the Italian Eni.
North Field East LNG is actually just the first – and largest – phase of the North Field expansion: it consists of six liquefied gas, or LNG, trains that are expected to boost Qatar's liquefaction capacity to 126 million tonnes per year. year by 2027, up from 77 million tonnes today. The second phase, to the south, is called North Field South: it consists of two trains with a combined annual capacity of 16 million tons. QatarEnergy has already signed three partnership agreements.
However, the company has communicated its intention to regain possession of a 75 percent stake in the North Field mega-project, with an estimated cost of 30 billion dollars.
WHAT SINOPEC AND QATAR ARE DOING
Sinopec chairman Ma Yongsheng said that cooperation with QatarEnergy will improve the security of energy supplies for China.
Last November, Sinopec signed a 27-year LNG supply contract from North Field East with QatarEnergy for no less than 27 years : Doha had never made such a long-term commitment. At the time, the firm said the deal was part of an "integrated partnership" with Qatar, possibly anticipating the acquisition of the stake in North Field East.
CHINA TAKES THE PLACE OF JAPAN?
All of these deals are also notable because they signal that China is displacing Japan, another major LNG importing country, in Qatar's top customer list.
Japanese energy companies prefer not to commit to long-term supply agreements because within a few years the ecological transition should cause a substantial reduction in the consumption of fossil fuels such as gas, which in electric applications will be replaced by renewable sources and nuclear power.
As the specialized portal S&P Global Platts points out, Qatar's share in Japanese LNG imports is gradually declining. In 2021, the top four buyers of Qatari liquefied gas were South Korea, India, China and Japan; in 2022 it was China, India and South Korea, with Japan being overtaken by European countries looking for alternative supplies to Russia .
China was Qatar's largest LNG buyer in 2022, an increase of nearly 70 percent.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/sinopec-qatar-north-field-east/ on Thu, 13 Apr 2023 07:55:47 +0000.