Qatar signs 27-year gas deal with Britain's Shell

Qatar signs 27-year gas deal with Britain's Shell

Since Moscow's invasion of Ukraine in February last year, European countries have scrambled to replace  lost deliveries of natural gas from Russia
Since Moscow's invasion of Ukraine in February last year, European countries have scrambled to replace lost deliveries of natural gas from Russia. Photo: Ina FASSBENDER / AFP
Source: AFP

Qatar has agreed to supply British firm Shell with natural gas for 27 years, the Gulf emirate's state-owned energy company announced on Wednesday.

Since Moscow's invasion of Ukraine last year, European countries have scrambled to replace lost deliveries of natural gas from Russia.

Qatar will supply 3.5 million tonnes of gas a year under the deal, QatarEnergy said, following two agreements with Shell for a share of the Gulf state's huge North Field gas expansion project.

"We are delighted to sign these two long-term LNG sale and purchase agreements with Shell that will further enhance our decades-long relationship and strategic partnership in Qatar and around the world," Qatari Energy Minister Saad al-Kaabi said.

"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," he added,

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In October last year, Shell inked a deal with QatarEnergy for a 9.4 percent stake in Qatar's North Field South project, the second phase in the expansion of the world's largest gas field, which extends under the Gulf into Iranian territory.

In July the same year it also agreed to a 6.25 percent share in the first phase of the expansion, North Field East.

Deliveries of the liquefied natural gas (LNG) to Rotterdam are expected to begin in 2026.

The deal with Shell is equal in length to an agreement with France's TotalEnergies announced earlier this month for a 27-year supply of natural gas.

Under its North Field expansion, Qatar is set to raise its output of liquified natural gas (LNG) by 60 percent or more to 126 million tonnes a year by 2027.

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The main market for Qatari gas has traditionally been found in Asia, led by countries like China, Japan and South Korea.

The deal with Shell and Total is also the same in length to those agreed by the China National Petroleum Corporation in June and China's Sinopec in 2022. All have set a benchmark as the longest in the liquefied gas industry.

US giants ConocoPhillips and ExxonMobil have also signed deals to partner in the expansion.

Qatar is one of the world's top LNG producers, alongside the United States, Australia and Russia.

QatarEnergy estimates the North Field holds about 10 percent of the world's known natural gas reserves.

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Source: AFP

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