Qatar, France sign LNG supply deal beyond 2050: Update

  • : Condensate, Crude oil, Natural gas
  • 23/10/11

Adds information about potential minimum delivery obligations to Fos Cavaou

State-owned QatarEnergy (QE) and France's TotalEnergies have signed two 27-year supply agreements for up to 3.5mn t/yr of LNG, starting in 2026, making France the first European country to purchase gas well beyond 2050.

The LNG "will be delivered ex-ship to the Fos Cavaou LNG receiving terminal in southern France", QE said today.

Volumes will be sourced from the two joint ventures between QatarEnergy and TotalEnergies that hold interests in Qatar's North Field East (NFE) and North field South (NFS) projects, according to QE.

But it remains unclear if there is a minimum delivery obligation to France. QatarEnergies has long-standing flexible supply arrangements into Europe with no minimum delivery obligation. These give the firm something akin to a put option that it can use to deliver uncommitted LNG cargoes to Europe after meeting delivery obligations to customers elsewhere who have contractual flexibility to adjust their offtake. These arrangements include an agreement to deliver up to 3.4mn t/yr of LNG (4.5bn m³/yr regasified) to EdF at Belgium's 7.2mn t/yr Zeebrugge facility, a deal for up to 2mn t/yr with UK utility Centrica at the UK's 14.8mn t/yr Isle of Grain terminal, and a marketing arrangement with ExxonMobil at the UK's 15.6mn t/yr South Hook terminal. QatarEnergies owns 70pc of South Hook, while ExxonMobil owns 30pc — the same split as their ownership of the under-development Golden Pass export facility in the US.

TotalEnergies holds a 6.25pc stake at NFE and 9.375pc at NFS. ExxonMobil also holds a 6.25pc stake in Qatar's NFE.

"The agreements we have signed… demonstrate our continued commitment to the European markets in general, and to the French market in particular, thus contributing to France's energy security," Qatari energy minister and QE chief executive Saad al-Kaabi said. "Qatar has been supplying the French market with LNG since 2009."

Al-Kaabi said in January that the 48mn t/yr NFE and NFS projects will be sold out potentially by the end of this year, with buyers in Asia-Pacific aware that there is a pull from Europe — "2023 is going to be a very big year for Qatar," he said. "A lot of things are going to be announced."

QE and Chinese state-run CNPC signed another 27-year supply agreement for 4mn t/yr of LNG in June.

The deal was the third offtake agreement for LNG from NFE. QE's first two supply agreements at 32mn t/yr NFE were a 27-year, 4mn t/yr agreement with Sinopec and a 15-year, 2mn t/yr deal with ConocoPhillips for delivery to Germany.

It is unclear whether a June deal with Bangladesh's state-owned Petrobangla to supply 1.8mn t/yr over 15 years will use NFE supply, LNG from NFS, or draw cargoes from existing facilities. The 16mn t/yr NFS expansion is due on line in 2027 and will increase Qatar's liquefaction capacity to 126mn t/yr.


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US WTI crude flows to India climb in April


24/05/22
24/05/22

US WTI crude flows to India climb in April

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Asia demand lifts US VLCC rates to 4-month high


24/05/21
24/05/21

Asia demand lifts US VLCC rates to 4-month high

Houston, 21 May (Argus) — Rates for 2mn bl very large crude carriers (VLCCs) on the US Gulf coast reached four-month highs on 17 May amid elevated Asia-Pacific demand for US crude, especially in China. The rate to ship 270,000t of crude from the US Gulf coast to China, including $250,000 Corpus Christi, Texas, load-port fees, climbed by 11.6pc from 7-17 May to $10.1mn lumpsum, or $4.85/bl for WTI, the highest level since 12 January, according to Argus data. A surge of demand in the first half of May reduced tonnage in the Atlantic basin as Chinese refiners eye the end of a heavy refinery maintenance season . Over that span, the time-charter equivalent (TCE) rate, which reflects daily earnings for shipowners, for a scrubber-fitted VLCC hauling crude from Corpus Christi to Ningbo, China, increased by about $9,150/d to $50,613/d, according to Argus data. Similarly, the US Gulf coast-Rotterdam VLCC rate on 17 May matched its highest level since 11 January, reaching $4.95mn lumpsum, or $2.38/bl for WTI, including load-port fees, after Asia-Pacific demand limited the amount of VLCCs available for shipments to Europe. The rally comes amid rising onshore inventories of crude in China. Stocks increased to 924mn bl in the week ended 19 May, the most in nearly five months, according to data from analytics firm Vortexa. "An expected increase in refinery utilization during the third quarter justifies inventory building during (the second quarter), while the current import trend and ongoing refinery maintenance may imply less sharp inventory builds during May-June compared to last year," shipbroker BRS said. Last year, Chinese inventories of crude shot up to 1.02bn bl at the end of July from about 925mn bl at the end of April, Vortexa data show. A slower pace of inventory builds may create a less volatile environment for VLCCs compared to last year, BRS said. By Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Brazil biomethane parity prices R2.43-2.79: Correction


24/05/21
24/05/21

Brazil biomethane parity prices R2.43-2.79: Correction

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Australia's Woodside plans CCS for Browse gas project


24/05/21
24/05/21

Australia's Woodside plans CCS for Browse gas project

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