Qatar Petroleum has inked the biggest long-term Liquefied Natural Gas (LNG) with the China National Offshore Oil Company (CNOOC) Ltd, according to GlobalData.
This contract adds to a tall list of long-term deals for liquefied natural gas (LNG) signed in 2021, following a drop in 2020 when short-term spot contracts saw a rise. GlobalData noted that 23 long-term contracts were signed by key purchasing companies in 2021, compared to 10 in 2020.
Bhargavi Gandham, Oil and Gas Analyst at GlobalData, explained that: “Buyers are, once again, looking towards long-term contracts to hedge price volatility and ensure guaranteed supply. The trend is expected to continue in 2022 as Liquefied Natural Gas prices in key markets such as Asia and Europe continue to be very high.”
The report released by Global Data revealed that the biggest long-term LNG contract signed this year was between Qatar Petroleum and CNOOC Ltd. in September 2021. Based on the terms of the contract, Qatar Petroleum will supply 3.5 million tonnes per annum (mtpa) of LNG from 2022 to 2036 from the country’s Ras Laffan III liquefaction terminal to CNOOC Ltd.
The report also confirmed that China-based Sinopec Corporation signed the most long-term LNG contracts in 2021, gaining five million tonnes of imported LNG per annum (mtpa).
“In terms of LNG purchase, the majority of long-term LNG contracts completed by Sinopec were signed with Venture Global LNG as part of China’s efforts to reduce the country’s carbon emissions. The country needs to substantially increase natural gas share in its energy mix in order to achieve its goal of becoming carbon neutral by the year 2060.”
Bhargavi Gandham, Oil and Gas Analyst
After Sinoptec, Vitol Group signed the second-highest number of long-term LNG contracts, gaining 4.3 mtpa, and Royal Dutch Shell signed the third highest, with 4.0 mtpa.
Tellurian Investment Signs Most Contracted Volumes in 2021
Among Liquefied Natural Gas (LNG) sellers, Tellurian Investments sold the largest total volume of LNG, at 9 mtpa, in three contracts with Gunvor Group Limited, Royal Dutch Shell, and Vitol Group, respectively. Tellurian Investments’ LNG will be supplied from the Driftwood terminal in Louisiana, GlobalData said.
Following Tellurian, Qatargas Operating Company sold the second most LNG volume, at 7.3 million tonnes per annum (mtpa), in agreements with Pakistan State Oil Company, China Petroleum & Chemical Corporation, CPC Corporation, and Royal Dutch Shell.
“State-owned companies in Qatar have mostly signed long-term LNG contracts in 2021 to supply key demand centres in Asia such as China and South Korea. These companies can sign more contracts in 2022 as the global economy recovers driving further LNG demand.”
Bhargavi Gandham, Oil and Gas Analyst
Qatar is the world’s largest LNG producer and as part of maintaining its dominance, it is upping its LNG volumes by developing a vast new north field with the aid of foreign investors. These investments which are getting harder and harder to do in the United States and elsewhere are increasing in Qatar. When this field is at full production, it will increase the country’s LNG exports by 64 percent to 126 mtpa by 2027.
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