In a move that observers described as a strategy at the level of strengthening economic relations and deepening the Chinese presence in the Arab region, the Qatari energy company signed an agreement with the Chinese side to supply 4 million tons of liquefied natural gas annually for a period of 27 years.
This contract is the second long-term contract signed by Qatar to supply China with liquefied natural gas, as Qatar state owned Energy Company concluded an agreement last November with China’s states owned Petrochemical Corporation (Sinopec) to supply 4 million tons of gas, in form of liquefied gas annually, from the Northeast Field Expansion Project, for a period of 27 years.
Observers said that the agreement increases the Chinese presence in the Arab region, and preserves the foundations of long-term energy contracts that European countries reject.
According to Zhao Zhijun, Chinese writer and researcher on Asian affairs, signing of a long-term gas deal between China and Qatar comes under the restrictions of carbon neutrality, as domestic natural gas consumption in China is expected to maintain steady growth in the next thirty years, and gas will become natural is the most important fossil energy in the country by 2050.
Qatar enjoys the lowest cost of natural gas production in the world, and it is able to export natural gas on a large scale.
Therefore, the signing of a long-term natural gas supply agreement between the China National Petroleum Corporation (CNPC) and Qatar Energy is very important to ensuring China’s energy security.
Zhao Zhijun explained that in addition to the sales agreement, Qatar Energy will also transfer a 1.25% stake in the Northeast Field Expansion Project to the Chinese “CNPC”.
Cooperation in the Northeast Field Expansion Project is an important milestone in promoting the joint construction of the Belt and Road initiative, and Qatar National Vision 2030.
The Chinese researcher stated that the Chinese CNPC will discuss comprehensive cooperation activity with Qatar Energy Company in the fields of the oil and gas industry chain, green and low-carbon energy, etc., and Chinese companies will also provide Qatar with proprietary technology and unique experience in developing oil, and gas fields.
Therefore, this project considered profitable for China and Qatar.
This year coincides with the tenth anniversary of China’s Belt and Road Initiative, and over the past decade, Middle Eastern countries have actively participated in this initiative.
Within the framework of the initiative, the Chinese-Arab cooperation in the fields of economy, trade, infrastructure, human sciences and others is proceeding in full swing.
At the same time, according to Jun, the successful Chinese mediation to resume diplomatic relations between Saudi Arabia and Iran led to the continued expansion of China’s influence in the Middle East, which made Middle Eastern countries trust China more and more.
Chinese companies have accelerated the development of infrastructure in the Middle East, and cooperation with Middle Eastern countries can ensure China’s energy security.
According to Chinese customs data, China imported 15.68 million tons of LNG from Qatar in 2022, an annual increase of 74%, accounting for 25% of total LNG imports, and this figure expected to increase significantly in the future, according to Legion.
Last April, Qatar Energy signed a partnership agreement to transfer a 5% stake to China Petrochemical Corporation (Sinopec) in part of the Northeast Gas Field expansion project in Qatar.
The share is part of one production line in the project with a production capacity of 8 million tons annually, while maintaining the shares of other partners unchanged.