Qatar signs 27-year gas deal with China
Deal will provide China with gas from Qatar's North Field East project until at least 2050
President Biden turns focus to gas prices and oil production ahead of midterms
Former Trump economic adviser Stephen Moore joins "The Evening Edit" to discuss the role of coal as an energy source in America.
The largest state-owned petroleum company in Qatar signed a 27-year sales and purchase agreement with China's Sinopec on Monday.
Saad al-Kaabi, the head of QatarEnergy, told news outlets Monday morning that the company signed one of the longest agreements in the history of liquefied natural gas deals with the Chinese state-owned firm.
"Today is an important milestone for the first sales and purchase agreement for North Field East project; it is 4 million tons for 27 years to Sinopec of China," al-Kaabi said in an interview with Reuters in Doha just before signing the deal.
"It signifies long-term deals are here and important for both seller and buyer," the energy chief added. Qatar shares the North Field, a part of the biggest gas field in the world, with its northern neighbor, Iran.
DIESEL HITS RECORD PREMIUM OVER GAS, OIL
QatarEnergy has signed a long-term oil sales and purchase agreement with China's Sinopec as Qatar begins hosting the 2022 FIFA World Cup. (iStock / iStock)
Previously, the company signed a deal to construct six additional LNG trains in North Field East that will help increase Qatar's liquefaction capacity to 126 million tons in five years. Moreover, QatarEnergy has signed other deals with partners for North Field South for additional expansion.
"We are very happy about this deal with Sinopec because we have had a long-term relationship in the past and this takes our relationship to new heights as we have an SPA that will last into the 2050s," al-Kaabi told Reuters. "I think the recent volatility has driven buyers to understand the importance of having long-term supply."
OIL MARKET FACES ‘CONSIDERABLE UNCERTAINTIES,’ OPEC WARNS
Al-Kaabi said the firm had ongoing negotiations with others buyers in China and Europe that want to have equity in future expansion projects.
In expansion projects in North Field, QatarEnergy retains at least a 75% stake and allows up to 5% equity for buyers, according to Reuters.