CPC signs LNG supply agreement with QatarEnergy

Taipei, June 8 (CNA) State-owned oil supplier CPC Corp., Taiwan has signed an agreement with QatarEnergy to secure a 27-year supply of liquefied natural gas (LNG).

In addition to the long-term LNG supply, both companies also inked a partnership agreement for CPC to take a 5 percent stake in QaterEnergy's North Field East (NFE) LNG expansion project.

The agreements were signed by Qatar Minister of State for Energy Affairs Saad Sherida Al-Kaabi, and CPC Chairman Lee Shun-chin (李順欽) in Doha June 5, QuaterEnergy said without disclosing any financial terms.

In a statement issued by QuaterEnergy earlier this week, under the LNG Sales and Purchase Agreement (SPA), the company said it has agreed to supply 4 million tons per annum (MTPA) of LNG from the NFE project to CPC for a period of 27 years.

Under a share sale and purchase agreement, QatarEnergy said it will transfer to CPC a 5 percent stake in the equivalent of one NFE train with a capacity of 8 million tons of LNG per year.

QaterEnergy said the stake transfer will allow CPC to become a partner in the NFE project without affecting the participating interests of any of the other shareholders in the project.

According to international news media, China National Petroleum Corp., ConocoPhillips, Eni, ExxonMobil, Shell, Sinopec and TotalEnergies are also in partnership with the NFE project.

Al-Kaabi said he welcomed CPC as a valuable partner in the NFE project.

"We look forward to further enhancing our relationship with CPC, which extends for over three decades, and to further demonstrate our unwavering commitment to our customers and partners around the world," Al-Kaabi said in the statement.

Al-Kabbi is also the president and CEO of QatarEnergy.

Qatar is one of the largest LNG producers in the world along with the United States, Australia and Russia.

According to international news media, Asian countries led by China, Japan and South Korea have been the major buyers of LNG from Qatar. After the breakout of the war between Russia and Ukraine in February 2022, demand from European countries has been also on the rise amid worries over supplies from Moscow.

"QatarEnergy, the world's leading LNG player, has played an important role in ensuring Taiwan's domestic gas market over the past decades," CPC's Lee said in the statement.

"CPC's acquired equity in the NFE project and this new LNG SPA will further strengthen the cooperative relationship between our two companies," Lee added.

According to QatarEnergy, the NFE project is part of the entire North Field LNG expansion program.

The North Field LNG expansion program, which broke ground in 2023, contains the world's largest natural gas reserves and extends under the Gulf into Iranian territory, media reported.

The expansion program, which also includes the North Field South and North Field West projects, will raise Qatar's LNG production capacity from the current 77 million metric tons per year to 142 million metric tons per year by 2030, QatarEnergy said.

According to CPC, Taiwan started importing LNG from Qatar in 2008, and the Middle East country has become an important and stable energy source for Taiwan.