QatarEnergy and Sinopec sign 27-year LNG supply agreement to China

QatarEnergy has entered into a 27-year Sale and Purchase Agreement (SPA) with China Petroleum & Chemical Corporation (Sinopec) for the supply of 4 million tons per annum (MTPA) of LNG to the People's Republic of China.

Under the terms of the SPA, the contracted LNG volumes will be supplied from QatarEnergy’s North Filed East (NFE) LNG expansion project and will be delivered to Sinopec’s receiving terminals in China, the company said in a statement.

His Excellency Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, the President and CEO of QatarEnergy, and Dr. MA Yongsheng, the Chairman of Sinopec, signed the agreement on Monday during a hybrid ceremony. Joining Minister Al-Kaabi at QatarEnergy’s headquarters in Doha were senior executives from both companies, while Dr. MA and other high level Sinopec executives participated virtually from Beijing.

“We are pleased to enter into this agreement, which will further solidify the excellent bilateral relations between the People’s Republic of China and the State of Qatar and help meet China's growing energy needs,” Al-Kaabi said in his remarks at the signing ceremony.

“In addition, it opens a new and exciting chapter in our relationship with Sinopec, one that is very special and spans a number of different areas, and which we are excited about further growing and expanding into the 2050s,” he said.

According to the minister, this is the first long-term SPA from the NFE project to be announced, and marks the longest gas supply agreement in the history of the LNG industry.

Commenting on the agreement, Dr. MA Yongsheng said: “The signing of the long-term LNG SPA with QatarEnergy is a milestone and an important part of the integrated cooperation between the two sides on the NFE project. Qatar is the world’s largest LNG supplier, and China is the world’s largest LNG importer. The two countries share inherent complementarities and a good foundation for energy cooperation.”

The Chinese executive said that close relations between the two countries have created the environment to deepen bilateral cooperation. “Sinopec attaches great importance to the cooperation with QatarEnergy, who we regard as a strategic, long-term and all-round partner, and we are expecting more cooperation fruits to come. Sinopec has been always committed to the development of green and clean energy. Our integrated cooperation with QatarEnergy on the NFE project could not only meet the needs of the Chinese market, but also reflect Sinopec's commitment to a low-carbon, green, safe, responsible and sustainable development path,” he added.

The agreement is the second LNG SPA between QatarEnergy and Sinopec, following the 10-year SPA signed in March 2021 for the supply of 2 MTPA to China, according to the companies.

The SPA is also the first long term LNG offtake agreement from the NFE Expansion project, and comes on the heels of QatarEnergy’s conclusion of the formation of eight international partnership agreements for the North Field East and North Field South (NFS) projects, which are expected to come online in 2026 and 2027, respectively.

QatarEnergy has also concluded construction contracts and long-term time charter agreements for 60 LNG carriers as part of its historic LNG shipbuilding program in support of both the NFE and NFS expansion projects, with the number expected to grow to almost 100 in the future.