QatarEnergy and PetroBangla Sign 15-Year LNG Supply Deal

Reuters, June 1, 2023

QatarEnergy has signed a 15-year supply deal for liquefied natural gas (LNG) with Bangladesh's state-owned PetroBangla for 1.8 million tonnes a year starting in 2026, CEO Saad al-Kaabi said on Thursday.

The latest contract with an Asian customer by the world's top LNG exporter comes when Western countries, including Germany, push to win a chunk of the Qatari gas as competition ramped up following the Ukraine war.

It is also QatarEnergy's second to Asia since it started selling the gas expected to come on stream from the North Field expansion project.

"The majority (of LNG exports) will be going to Asia and the other will be going to Europe and we'll be more than sold out as far as volumes of NFE and NFS," Kaabi told a news conference in Doha, referring to the two-phase North Field expansion plan.

The expansion will raise Qatar's liquefaction capacity to 126 million tonnes per year by 2027, from 77 million currently.

Nasrul Hamid, Bangladesh's Minister of State for Power, Energy and Mineral Resources, attended the signing of the PetroBangla deal in the Qatari capital.

Kaabi said QatarEnergy would sign LNG supply deals, which are close to be finalised, with European customers likely after the summer break, adding that the duration of contracts was not an issue during the negotiations.

But Europe's climate goals - the EU aims to cut net emissions at least 55% by 2030, and to reach net zero by 2050 - mean its LNG buyers struggle to commit to long-term agreements.

"If a European is actually negotiating with me and has an issue, he will tell me 'I have an issue with duration,' I've not heard that," Kaabi said.

Energy-hungry Europe still needs vast amounts to help replace the Russian gas that used to make up almost 40% of the continent's imports before the Russian invasion of Ukraine.

But Asia, with an appetite for long-term sales and purchase agreements, has been ahead so far in securing gas from Qatar's massive production expansion project.

(Reporting by Andrew Mills; Writing by Nadine Awadalla and Aziz El Yaakoubi; Editing by David Goodman and Sriraj Kalluvila)

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