In a significant move to strengthen Europe's energy security and meet its growing demands for liquefied natural gas (LNG), QatarEnergy has expanded its global reach by entering into a 27-year supply agreement with Shell, providing 3.5 mn metric tons of LNG per annum. This groundbreaking deal closely follows a similar agreement with TotalEnergies, cementing Qatar's position as a vital supplier of natural gas to the European continent.
The agreements, signed by QatarEnergy and Shell affiliates, involve the supply of LNG sourced from the extensive North Field LNG production expansion project. Deliveries are set to commence in 2026 and will flow into the Gate LNG terminal at the Port of Rotterdam, making the Netherlands a major beneficiary of this strategic partnership.
"The LNG volumes will be sourced from the two joint ventures between QatarEnergy and Shell that hold interests in Qatar's North Field East (NFE) and North Field South (NFS) expansion projects," QatarEnergy announced in a statement.
Shell, with a 6.25% stake in the North Field East project and a 9.375% share in the North Field South project, is set to play a crucial role in facilitating the successful execution of the agreement.
This deal mirrors the one recently reached between QatarEnergy and TotalEnergies, which marked Qatar's most substantial and extended commitment to supplying Europe with LNG. The continent is facing increasing demand for natural gas, especially since the onset of the conflict in Ukraine, which disrupted traditional supply routes of Russian pipeline gas.
Asia has been ahead of Europe in securing long-term LNG supply agreements with Qatar, a trend driven by a growing appetite for such agreements. Qatar's two-phase expansion plan, set to raise its liquefaction capacity from 77 mn to 126 mn metric tons annually by 2027, has been highly sought after by Asian buyers.
QatarEnergy has signed numerous agreements in the Asian market over the past year, including a 27-year supply contract with China's Sinopec, sealed in November, for 4 mn metric tons a year. A similar agreement was inked in June with China National Petroleum Corporation (CNPC). These deals have positioned Qatar as the leading LNG exporter globally and as a key contributor to the energy needs of growing Asian economies.
Saad al-Kaabi, CEO of QatarEnergy, expressed his commitment to meeting Europe's energy demands and enhancing its energy security. He emphasized the reputation of Qatari LNG for its superior economic and environmental qualities, acknowledging the responsibility QatarEnergy bears in ensuring a stable and sustainable energy supply for the continent.
"These agreements reaffirm Qatar's commitment to help meeting Europe's energy demands and bolstering its energy security with a source known for its superior economic and environmental qualities," Chief Saad al-Kaabi voiced.
The agreements with Shell and TotalEnergies mark an important milestone in the global energy landscape, enhancing Qatar's stature as a reliable supplier of LNG to Europe, and reinforcing the region's energy security amid changing geopolitical dynamics.
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