Singapore/London — State-owned QatarEnergy has signed a long-term sales and purchase agreement with oil and gas major Shell to supply it with liquefied natural gas (LNG) for delivery to China,
The deal is for the supply of three million metric tons per annum year of LNG, said QatarEnergy in a statement on Monday, adding that the agreement will start in January 2025.
QatarEnergy added that the agreement highlights the continued growth of China’s LNG market, but did not say how long the duration of the supply deal with Shell would be.
Four trading and industry sources said the volumes will go to Shell’s supply pool under its portfolio in China.
China is the world’s largest importer of LNG. It shipped in 71 million metric tons of the super-chilled fuel in 2023, and a record high of nearly 79 million metric tons in 2021, according to the country’s customs data.
Shell forecasts the LNG market will grow by around 50% by 2040 from around 400 mtpa in 2023 as Asian economies grow and as gas, the least polluting fossil fuel, replaces coal in power generation.
Strong LNG sales helped boost Shell’s third-quarter profits of $6 billion that exceeded forecasts by 12%.
Shell, the world’s biggest LNG trader, and other companies including BP say they have lost billions of dollars in profit from gas promised under long-term contracts but it was not delivered. Venture Global LNG contends it has not fully commissioned the Louisiana plant.
Qatar is the third largest LNG exporter globally after the U.S. and Australia. It has exported 73 million metric tons of LNG so far this year, according to data from analytics firm Kpler.
Qatar Energy’s Chief Executive Saad Al-Kaabi said that he sees a bright future for LNG for at least 50 years, especially in Asia.
Between 2022-2023, QatarEnergy agreed a series of 27-year deals to supply Chinese buyers with new gas from North Field.
Reporting by Emily Chow and Aizhu Chen in Singapore and Marwa Rashad in London, Editing by Louise Heavens – Reuters
