QatarEnergy and Shell have entered into a new long-term sale and purchase agreement (SPA) for the supply of three million tonnes per annum (mtpa) of liquefied natural gas (LNG) to China.
LNG deliveries will start in January 2025, underscoring the continued growth of China’s LNG market, which is projected to be the largest globally.
H.E. Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, the President and CEO of QatarEnergy, said, “This agreement helps meet the requirements of Shell’s end customers in China and enhances our contributions to meeting the needs of LNG end-users worldwide.”
Global LNG prices are expected to decline due to a flood of export capacity coming online through to 2028, primarily in the US and Qatar.
Although China is the world’s largest LNG importer, the country’s coal demand has increased more than LNG imports every year since 2017, according to a report from the Institute for Energy Economics and Financial Analysis (IEEFA).
IEEFA finds LNG is not displacing coal in China’s power mix and it will play a ‘minimal role’ in supporting the transition in the largest coal in power generation.
“China has clear reasons to rely on domestically available resources for energy security and reliability rather than basing its power sector development on global LNG markets that have proven wildly unpredictable over the past three years,” it concludes.
“As a result, policymakers in both LNG exporting and importing countries should approach industry arguments about the necessity of LNG as a ‘bridge fuel’ from coal to renewables with a high degree of scepticism.”
Last month QatarEnergy inaugurated four new conventional-size LNG vessels built in the Samsung Heavy Industries Shipyard and the Hanwha Ocean Shipyard in the Republic of Korea as part of its fleet expansion programme.
The quartet form part of 128 total vessels ordered from Korean and Chinese shipyards as part of the largest shipbuilding programme in the history of the LNG shipping industry.
Read more: Qatar inaugurates four LNG vessels
QatarEnergy recently laid the foundation stone for a blue ammonia plant at a ceremony in Mesaieed Industrial City.
The plant – scheduled to open in 2026 – will be the largest of its kind globally and represents an important milestone in QatarEnergy’s strategy to expand in the clean energy sector by producing low carbon ammonia.
The facility will have a capacity of 1.2 million tonnes per year, along with an additional unit for CO2 injection and storage, with capacity of 1.5 million tonnes annually.
Read more: Qatar lays foundation stone for blue ammonia plant
