QatarEnergy signs 10-year condensate supply deal with Enoc

Agreement involves supplying up to 120 million barrels of condensates

The agreement between QatarEnergy and Enoc takes effect this month. AFP
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QatarEnergy has signed a long-term condensate supply agreement with Dubai-based Emirates National Oil Company.

The 10-year sale agreement involves the supply of up to 120 million barrels of condensates to Enoc, starting this month, a joint statement on Monday read.

“We are pleased to sign this long-term condensate sale agreement, further strengthening QatarEnergy’s relationship with Enoc, which extends back to 2008,” said Saad Al Kaabi, Qatar's Minister of State for Energy Affairs, and president and chief executive of QatarEnergy.

“We look forward to building on the historic working relationship and the trust in Qatar’s condensate exports to help further the growth and development our partners hope to achieve.”

Condensate, which occurs mostly as a by-product of natural gas production, is used to process refined products such as petroleum, jet fuel, diesel and heating fuel.

The agreement with QatarEnergy will “strengthen the co-operation and partnership between both organisations”, said Saif Al Falasi, group chief executive of Enoc.

“We recognise the role we play in contributing towards UAE’s continued success by collaborating with government entities across the globe.”

QatarEnergy can increase the condensate volumes supplied to Enoc once the North Field East (NFE) and North Field South (NFS) expansion projects come online, the companies said.

North Field spans more than 6,000 square kilometres – equivalent to about half the land area of Qatar – and represents 20 per cent of the world's total gas reserves, according to QatarEnergy.

Qatar – which is among the world's biggest exporters of liquefied natural gas, alongside the US and Australia – is seeking to increase its production and respond to higher global demand for LNG.

Last month, QatarEnergy signed its second major natural gas supply deal with China in less than a year, with the state-owned company and China National Petroleum Corporation entering into a 27-year agreement for the delivery of 4 million tonnes of LNG per year.

CNPC also picked up a stake in the eastern expansion of Qatar's North Field LNG project.

Global LNG trade hit a high of $450 billion in 2022 as Europe scrambled to secure supplies to replace Russian gas, according to the International Energy Agency.

Despite a rise in demand, LNG supply grew by only 5.5 per cent last year, mostly due to maintenance at large export terminals and as Freeport LNG’s Texas-based plant – one of the world’s largest export centres of the fuel – was shut down after a fire in June 2022.

Enoc, which owns and operates assets in the fields of exploration and production, terminals, fuel retail, aviation fuel and petroleum products, has been expanding its operations.

Last year, Enoc signed an initial agreement with Japanese heavy-industry manufacturer IHI Corporation to explore setting up a low-carbon hydrogen and ammonia plant in the UAE.

The fuel produced will be exported to Japan and supplied within the UAE as well as the broader region for bunkering and other purposes, the Dubai Media Office said in a statement in November.

In February, Enoc joined forces with Dubai Electricity and Water Authority to develop and operate a joint integrated pilot project for the use of hydrogen in mobility.

The proposed project would take advantage of Dewa’s existing green hydrogen production centre in the Mohammed bin Rashid Al Maktoum Solar Park and Enoc's knowledge of the fuel market and customer base, the companies said.

Updated: July 10, 2023, 10:06 AM