QatarEnergy has signed a 27-year deal to supply China Petroleum & Chemical Corporation (Sinopec) with 4 million tons per annum (mtpa) of liquefied natural gas.
The contracted LNG volumes will be supplied from QatarEnergy’s North Filed East (NFE) LNG expansion project and will be delivered to Sinopec’s terminals in China, Qatar’s state energy company said in a statement on Monday.
The financial terms of the deal were not disclosed.
“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,” Saad Al Kaabi, Qatar’s Minister of State for Energy Affairs and the chief executive of QatarEnergy, said.
“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.”
The current strains on gas supply have led to energy shortages in several parts of the developing world that rely on imported gas, notably Pakistan and Bangladesh. Major growth markets for gas, such as India and China, meanwhile sharply reduced their LNG imports in 2022.
Natural gas markets are expected to remain tight in 2023 as Russia, one of the world’s largest exporters, further reduces supplies to Europe, according to the International Energy Agency (IEA).
Demand in China and Japan, the world's biggest importers of LNG, was almost unchanged in the first eight months of 2022, compared with the same period a year earlier, while it contracted in India and Korea, the Paris-based agency said in an October report.
Demand in China is expected to rise by less than 2 per cent in 2022, its lowest yearly growth rate since the early 1990s.
“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 co-operation,” MA Yongsheng, chairman of Sinopec, said.
“The friendly and close ties between the two countries have created a good environment for us to constantly deepen co-operation.”
In September, Qatar selected France's TotalEnergies as its first international partner at its North Field South (NFS) LNG project.
Together, NFE and NFS form the North Field Expansion project, which aims to add 48 mtpa to Qatar’s export capacity and bring it to 126 mtpa by 2028.
Qatar, alongside the US and Australia, is seeking to increase its LNG production and respond to higher global demand for LNG.
As the global energy crisis deepens and countries seek reliable energy sources, investments in new LNG infrastructure are set to surge, reaching $42 billion annually in 2024, Rystad Energy said in an August report.
The shutdown of Freeport’s LNG export plant in Texas has added to the squeeze on global gas supplies.
Freeport LNG, one of the seven export facilities for the commodity in the US, represents about 4 per cent of the global LNG market and its shutdown has curtailed the country's LNG export capacity by about 2 billion cubic feet per day, according to the US Energy Information Administration.
NBA Finals results
Game 1: Warriors 124, Cavaliers 114
Game 2: Warriors 122, Cavaliers 103
Game 3: Cavaliers 102, Warriors 110
Game 4: In Cleveland, Sunday (Monday morning UAE)
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Cultural fiesta
What: The Al Burda Festival
When: November 14 (from 10am)
Where: Warehouse421, Abu Dhabi
The Al Burda Festival is a celebration of Islamic art and culture, featuring talks, performances and exhibitions. Organised by the Ministry of Culture and Knowledge Development, this one-day event opens with a session on the future of Islamic art. With this in mind, it is followed by a number of workshops and “masterclass” sessions in everything from calligraphy and typography to geometry and the origins of Islamic design. There will also be discussions on subjects including ‘Who is the Audience for Islamic Art?’ and ‘New Markets for Islamic Design.’ A live performance from Kuwaiti guitarist Yousif Yaseen should be one of the highlights of the day.
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- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
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