China National Petroleum Corp (CNPC) is in advance talks to sign a liquefied natural gas (LNG) deal with Middle Eastern exporter QatarEnergy, reported Reuters, citing three people with knowledge of the matter.
Under the deal, which is expected to have a period of nearly 30 years, QatarEnergy would deliver LNG from its North Field expansion project.
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The agreement is part of China’s plan to diversify its gas sources in a bid to replace coal and reduce carbon emissions.
If the deal materialises, the agreement would mark the second such deal between Qatar and China.
In November 2022, China’s Sinopec signed a 27-year deal with QatarEnergy, whereby the latter agreed to supply four million tonnes of LNG to the Chinese firm.
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A Beijing-based state-oil official was quoted by the news agency as saying: “CNPC has agreed on the major terms with Qatar in a deal that will be very similar to Sinopec’s.”
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By GlobalDataTrident LNG trading global head Toby Copson said: “This is a good move for CNPC, securing additional long-term supply from a reliable and well positioned partner. This will further insulate from market volatility, diversify supply while optimising between the state owned units.”
In November, Sinopec said the LNG purchase agreement was part of an ‘integrated partnership’, whereby the firm could purchase stakes in the North Field expansion export facility.
A second Beijing-based state gas official was cited by the news agency as saying that Chinese firms Sinopec and CNPC would not sign long-term LNG contracts with QatarEnergy unless they would consider acquiring small stakes in the North Field expansion export facility.
QatarEnergy CEO Saad al-Kaabi said the firm maintained a 75% stake overall in the North Field expansion project, which is expected to cost at least $30bn.
