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Long-term deal locks in energy supply

China Daily | Updated: 2022-11-24 07:57

Technicians check out facilities at Sinopec's Fuling shale gas field. [Photo/China Daily]

QatarEnergy has signed a long-term deal to supply China's Sinopec with liquefied natural gas. At 27 years, it is the longest such liquefied natural gas agreement to date.

The long-term purchase and sale agreement signed between China and Qatar reflects the stable energy cooperation relationship between the two countries and the volatility in the global energy market that is driving buyers to seek long-term supplies.

For Qatar, its consolidation as the world's leading exporter of LNG is a matter of national development. In the restructuring of the global energy consumption market, the role of LNG in fossil energy will be further promoted.

China is a major energy consumer and importer. Last year, it overtook Japan to become the world's largest LNG importer. China's total LNG supply reached 81.4 million tons last year, with imports accounting for 45 percent of its domestic demand. Of the LNG imports, nearly 9 million tons, or 11 percent, came from Qatar.

Over the first five months of this year, LNG imports from Qatar accounted for about 24.9 percent of China's domestic LNG consumption, indicating the increasingly significant role Qatar is playing in ensuring the energy security of the world's second-largest economy.

China is also a major player in the LNG industry. The investment cycle is long and the investment scale is large. The production, transportation and trading of LNG entail a complex industrial and infrastructure system. The participation of Chinese enterprises in the production and transportation of LNG also enhances China's position in the global energy industry system.

Natural gas prices have been volatile this year, and they will continue to be volatile for the foreseeable future. China has benefited tremendously from a large number of medium- and long-term LNG agreements and relatively low pipeline gas prices, which have allowed the country to fend off the impacts of the fast rise of natural gas prices.

The long-term energy cooperation between China and Qatar and other energy exporting countries represent a new mode of cooperation featuring predictability and stability between partners that have deep mutual trust with one another, as well as a win-win scenario for both sides.

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