QatarEnergy has signed a partnership agreement with China Petrochemical Corporation (Sinopec) for the North Field South expansion project.
The companies also signed a long-term sales and purchase agreement for the delivery of 3 million tonnes per annum of liquefied natural gas from the NFS project to Sinopec’s China terminals for 27 years, Qatar’s state-owned energy company said on Saturday.
Under the terms of the agreement, QatarEnergy will transfer a 5 per cent stake to Sinopec in a joint venture company that owns the equivalent of 6 mtpa of LNG production capacity in the NFS project.
NFS is the second expansion phase of the North Field gasfield, one of the largest non-associated natural gasfields in the world.
The North Field Expansion development plan includes six LNG trains, which will help to ramp up Qatar’s liquefaction capacity to 126 mtpa by 2027, from 77 mtpa currently.
In June, QatarEnergy also entered into a 27-year agreement with China National Petroleum Corporation for the delivery of four million tonnes of LNG a year.
“These historic milestones are a testament to the excellent bilateral relations between the People’s Republic of China and the State of Qatar as well as between Sinopec and QatarEnergy,” the Doha-based company said.
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. 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.
After becoming the world’s largest LNG importer in 2021, China’s imports of the fuel fell by 20 per cent last year amid lower demand and high spot prices.
The IEA expects global natural gas demand to slow in the coming years amid declining consumption in mature markets due to an “accelerated” roll-out of renewables and improved energy efficiency.
Demand is projected to grow by 1.6 per cent a year between 2022 and 2026, down from an average of 2.5 per cent a year between 2017 and 2021, the Paris-based agency said in its Gas 2023 Medium-Term Market Report last month.
China, the world’s second-largest economy, is set to account for about half of the total growth in demand until 2026 as the country uses the fuel for industrial production and power generation.