Qatar Petroleum – the state-controlled conglomerate operating the massive Ras Laffan LNG complex – has begun the year with a series of LNG supply deals to cement its future position in Asia.
With new supply agreed for Bangladesh and Pakistan, Qatar Petroleum also secured long-term deals with China, South Korea and Taiwan in quick succession in June and July. Meanwhile, Qatar’s LNG continues to expand its market share in the Far East.
State-owned Qatar Petroleum has signed three new LNG supply agreements (SPA) in close succession this summer.
All three agreements add to Qatar’s ongoing push to ship more LNG from its massive LNG complex at Ras Laffan to key Far Eastern buyers.
Earlier in Q1 this year, Qatar Petroleum already signed a new agreement with China’s Sinopec whilst also striking agreements closer to home with commodities trader Vitol (to supply Bangladesh) and Pakistan.
Expanding market share
Qatar has continued to expand its market presence in the Far East, with exports to the region amounting to 2.75mmt in June this year, our data show.
This constitutes robust year-on-year growth of 37pct, up 0.75mmt from the 2.0mmt we recorded in June 2020.
Notably, whilst our 2020 data reflect the global struggle with the coronavirus pandemic, Qatar’s exports in June 2021 had also grown by c. 0.26mmt (10pct) when compared to June 2019.
First of three
The first of the Far Eastern deals was a 10-year agreement with Shell to supply 1.0mtpa to various LNG terminals in China starting in 2022.
The deal brought Qatari LNG supplies to China under long-term deals to 12 million mtpa.
Commenting on Qatar’s latest addition to China-bound supply contracts, H.E. Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs and president and CEO of Qatar Petroleum, said: “We are pleased to enter into this new LNG SPA with our trusted partner, Shell.
I am especially delighted that this agreement will meet part of the demand of Shell’s end customers in China, thereby further supplementing Qatar’s contribution to meeting China’s growing energy needs.”
The deal with Shell was followed by a 15-year agreement to supply 1.25mtpa to Taiwan’s CPC Corporation, which operates the country’s LNG terminals at Taichung and Yung-an.
The agreement with CPC will become effective January 2022.
In a statement relating to the CPC agreement, Qatar Petroleum said: “This SPA further demonstrates the State of Qatar’s continued commitment to meeting the growing energy requirements of its customers around the world in the form of reliable long-term LNG supplies.”
Al-Kaabi said: “We are pleased to enter this long-term LNG SPA, which is another milestone in our relationship with CPC, which dates back to almost three decades.”
The other 20-year agreement with South Korea’s KOGAS for the supply of 2.0mmt per year, due to commence in 2025.
The Energy Ministry added that KOGAS already buys 9.0mmt from Qatar each year through various long-term contracts.
However, a contract amounting to 4.9mmt is due to expire in 2024. Concerning the KOGAS agreement, Qatar Energy Ministry said in a statement: “This long-term contract is considered to have favourable contract conditions, which would help stabilise LNG supply as well as to significantly drop fees."