QatarEnergy, TotalEnergies Agree to 27-Year LNG Supply Deal

Reuters, October 11, 2023

Qatar on Wednesday secured its largest and longest European gas supply deal from Doha's massive production expansion project, providing France with up to 3.5 million metric tons of Liquefied Natural Gas (LNG) a year for 27 years.

Affiliates of QatarEnergy and France's TotalEnergies signed two long-term sales and purchase supply agreements for delivery to the Fos Cavaou LNG receiving terminal in southern France, with deliveries expected to start in 2026, a statement by QatarEnergy said on Wednesday.

The LNG volumes will be sourced from the two joint ventures between QatarEnergy and TotalEnergies that hold interests in Qatar’s North Field East (NFE) and North field South (NFS) projects.

TotalEnergies’ partnership in the North Field LNG expansion projects is made up of a 6.25% share in the NFE project and a 9.375% share in NFS.

Asia, with an appetite for long-term sales and purchase agreements, has thus far outpaced Europe in locking in supply from Qatar's two-phase expansion plan that will raise its liquefaction capacity to 126 million metric tons a year by 2027 from 77 million.

QatarEnergy has signed deals to supply LNG from the expansion to Asian buyers over the past year in China and elsewhere.

The Asian deals include a 27-year supply agreement with China's Sinopec sealed in November for 4 million metric tons a year and an identical one signed in June with China National Petroleum Corporation (CNPC).

The French agreements signed on Wednesday, "demonstrate our continued commitment to the European markets in general, and to the French market in particular, thus contributing to France’s energy security," QatarEnergy chief Saad al-Kaabi said.

Qatar is the world's top LNG exporter and competition for LNG has ramped up since the beginning of the war in Ukraine, with Europe in particular needing vast amounts to help replace Russian pipeline gas that used to make up almost 40% of the continent's imports.

The first European supply deal from Qatar's expansion project was signed in November to deliver around 2 million tons a year to Germany for a period of at least 15 years.

(Reporting by Maha El Dahan; Editing by Louise Heavens and Sharon Singleton)

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