QatarEnergy signs LNG long-term deal with Shell to deliver LNG to China

State-owned QatarEnergy signed a long-term agreement with Shell, the oil and gas giant, to supply LNG to China.

QatarEnergy said in a Monday statement that the deal will see the LNG supply increase to three million tons per year. The agreement is expected to begin in January 2025.

QatarEnergy said that the agreement highlighted the continued growth in China's market for LNG, but did say how long it would last.

Four sources in the industry and trading have confirmed that Shell will use these volumes to supply its China portfolio.

China is the largest LNG importer in the world. According to customs data, China imported 71 million tons of super-chilled gas in 2023 and nearly 79 millions tons in 2021.

Shell predicts that the LNG market in Asia will grow from 400 mtpa to around 500 mtpa by 2040, as the Asian economies continue to grow, and gas, which is the least polluting fuel, replaces coal for power generation.

Shell's profits for the third quarter of 2006, which exceeded expectations by 12% due to strong LNG sales, reached $6 billion.

BP, the largest LNG trader in the world, and several other companies, including BP, claim they lost billions of dollar profit on gas that was promised as part of long-term contracts, but not delivered. Venture Global LNG claims that the Louisiana plant has not been fully commissioned.

Qatar is the world's third largest LNG exporter after the United States and Australia. According to Kpler, it has exported 73 millions metric tons (metric tons) of LNG this year.

Saad al-Kaabi, Qatar Energy's chief executive, said that he believes LNG will have a bright future in Asia for at least the next 50 years.

QatarEnergy has agreed to a series 27-year contracts between 2022-2023 for the supply of new gas to Chinese consumers from North Field.

(source: Reuters)