Qatar signed the second 27-year supply agreement with China's national oil corporation Tuesday, with efforts to expand production from its natural gas field, which happens to be the largest of its kind in the world.
The agreement, to supply four million tons annually to the China National Petroleum Corporation (CNPC), matches the terms of a November deal with China's Sinopec as the longest ever seen in the industry.
Asian countries led by China, Japan and South Korea are the main market for Qatar's gas, which has been increasingly sought by European countries since Russia's invasion of Ukraine early last year.
"Qatar will supply four million tons annually of natural gas from the North Field East Expansion Project to China over 27 years," Qatar's Energy Minister Saad Sherida al-Kaabi told a signing ceremony in Doha.
"This will become the second LNG (liquefied natural gas) sale and purchase agreement to China within the North Field East Expansion Project," added al-Kaabi, who is also head of state firm QatarEnergy.
By expanding activities at North Field, which has the world's biggest natural gas reserves and extends under the Gulf into Iranian territory, Qatar is raising its LNG production by 60%-plus to 126 million tons a year by 2027.
CNPC signed a separate agreement for a 5% interest in North Field East, the equivalent of one gas-liquifying complex producing eight million tons of LNG annually.
"It lays a solid foundation for the energy cooperation between the two sides in the next three decades," CNPC chairperson Dai Houliang said in a statement.
"CNPC will continue to actively discuss with QatarEnergy all-round cooperation across the hydrocarbon industry chain and other areas like green and low carbon energies," he added.
The value of the deals was not announced.
Qatar, whose gas riches have made its per-capita gross domestic product among the highest in the world, has struck a series of major agreements surrounding the North Field expansion.
Earlier this month, QatarEnergy agreed on a 15-year supply deal with Bangladeshi state firm Petrobangla, and last month it awarded a $10 billion contract to France's Technip Energies and Consolidated Contractors Company for the engineering, procurement and construction of the North Field South project.
In April, Sinopec became the first Asian firm to get a stake in the North Field East expansion, also gaining a 5% stake.
"This type of long-term, large volume deal is exactly what QatarEnergy wants," said Ben Cahill, a senior fellow at the Center for Strategic and International Studies (CSIS).
"QatarEnergy probably has over 60 million tons per year in uncontracted LNG capacity... So as big as this deal is, Qatar needs to stack up a lot of these."
According to Justin Alexander, director of the Khalij Economics consulting firm: "The solid and long-term demand from Asia may spur European buyers to advance negotiations to ensure the security of supply."
Although much of its gas is sold to Asian countries, Qatar announced its first major deal with Germany in November, selling up to two million tons annually for 15 years.
The talks took several months as Germany resisted the long-term contracts that Qatar normally demands to justify its massive investment.
Russia's invasion of Ukraine increased pressure on the German government to find new sources of supply.
