China secures 52.5 million mt of LNG in deal with Qatar
Amid a crippling energy crisis, China has secured supply of 52.5 million metric tons of Liquified Natural Gas (LNG) in a deal with Qatar.
State-owned oil and gas giant, Qatar Petroleum will deliver the LNG over a 15 year period, with the first shipment planned for January 2022.
“We are pleased to further build upon our strong relationship with the China National Offshore Oil Corporation with the signing of this new long-term LNG supply agreement,” said Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs
“We are especially proud to continue to meet the People’s Republic of China’s growing need for cleaner energy that LNG provides, and are thankful to the China National Offshore Oil Corporation for partnering with us as their trusted LNG supplier.”
China has a long history of buying LNG from Qatar. The first major LNG deal between the countries was signed in 2009. As of August 2021, Qatar has delivered a total of 715 LNG cargoes to China.
Qatar currently has the capacity to produce around 77 million mt per year of LNG. This capacity is likely to increase significantly in the coming years.
Global natural gas shortage
The deal comes after Asia Markets reported on surging natural gas demand earlier this week, as China and parts of Europe face unprecedented power outages.
Alexey Miller, the CEO of Russia’s Gazprom, has labelled China’s thirst for natural gas “staggering”.
“There is no doubt that the Chinese market is the most dynamic and fast-growing one, and it shows simply unbelievable consumption growth rates every year,” he said.
Many investors are anticipating an historic natural gas bull market, which would have major implications for inflation, globally.