EXCLUSIVE Chinese companies in advanced talks with Qatar for stakes in gas fields and LNG offtakes – sources

A model LNG carrier is seen in front of the flag of Qatar in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

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SINGAPORE, June 17 (Reuters) – China’s national oil majors are in advanced talks with Qatar to invest in the North Field East expansion of the world’s largest liquefied natural gas (LNG) project and buy the fuel as part of the long-term contracts, three people with knowledge of the matter said.

It would be the first such partnership between the two countries, among the world’s top consumers and producers of LNG, as the Middle Eastern energy exporter looks to expand its Asian customer base. Global energy companies were once the main investors in Qatar’s gas industry.

Qatari supply deal will help China buffer spot price volatility and diversify imports; relations with two major suppliers, the United States and Australia, are at an all-time low, and another, Russia, is at war and facing widespread sanctions. Beijing sees gas as a strategic bridging fuel to replace coal on the road to carbon neutrality by 2060.

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Qatar was China’s largest LNG supplier after Australia in the first five months of 2022, according to data from Refinitiv Eikon.

China’s share of LNG imports from Qatar increased to 24.9% in Jan-May 2022 from 11.7% in Jan-May 2022

State-controlled CNPC and Sinopec are each set to invest a 5% stake in two separate export trains, as part of North Field’s nearly $30 billion expansion project, Reuters told Reuters. all three sources aware of the discussions.

“Participation, even a small stake, would give the Chinese direct access to the highly globalized project and learn about its management and operational expertise,” said one of the sources, a Beijing-based senior industry official.

The North Field expansion includes six LNG trains that will increase Qatar’s liquefaction capacity from 77 million tonnes per annum (mtpa) to 126 mtpa by 2027, cementing its status as the world’s top producer.

Qatar treats each export train as a joint venture and CNPC and Sinopec will each invest in one train, the sources said.

Sinopec declined to comment. A CNPC representative said he had no information to share.

QatarEnergy did not respond to Reuters request for comment.

In addition, CNPC and Sinopec are negotiating with state-owned QatarEnergy to buy up to 4 mtpa of LNG each for up to 27 years, two of the sources said, in what would be the world’s largest super fuel purchase transaction. refrigerated. between the two nations.

In 2021, China imported nearly 9 million tonnes of LNG from Qatar, or 11% of the country’s total LNG imports.

Discussions are focused on pricing long-term supply deals that will be tied to the global oil market, another of the three sources said.

QatarEnergy said on Sunday that TotalEnergies had become its first partner for the project, winning a 25% stake in a train. Asian buyers are expected to make up half of the project’s market and European buyers the rest, the managing director of QatarEnergy said. Read more

Exxon Mobil Corp (XOM.N), Shell (SHEL.L), ConocoPhillips (COP.N) and Eni (ENI.MI) had also submitted bids for the project. Read more

Main global LNG prices

“The Chinese stake in trains is more of a financial investor because the stake is very low. The key is negotiating prices for long-term gas drawdowns,” the third source said.

This person added that Indian companies are also interested in discussing the issues with Qatar, but did not elaborate.

China, the world’s largest buyer of LNG in 2021, imports 45% of its natural gas needs and sees Qatar as a reliable long-term supplier after a wave of purchase agreements with the United States at the end of 2021. read the after

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Reporting by Chen Aizhu; additional reporting by Marwa Rashad and Ron Bousso in London and Andrew Mills in Doha; edited by

Our standards: The Thomson Reuters Trust Principles.

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