December 02, 2008

CNPC inks LNG supply deal with Qatar Petroleum & Shell

China National Petroleum Corporation recently announced that it has signed an agreement with Qatar Petroleum and Royal Dutch Shell for a 25 year LNG supply deal. The deal was signed by Chinese Premier Mr Wen Jiabao and Qatar Prime Minister Mr Sheikh Hamad bin Jassem al Thani.

Under the agreement, CNPC will purchase 3 million tonnes of LNG per year from the Qatargas 4 LNG project, in which Qatar Petroleum holds 70% and Shell 30%.

The Qatargas 4 LNG project is expected to produce 1.4 million cubic feet of gas per day. It will entail the development of facilities capable of producing 7.8 million tonnes of LNG per year.

It may be noted that China is increasingly turning to clean energy such as LNG as part of an effort to reduce greenhouse emissions. China is seeking to boost gas consumption to 9% of total energy used from the current 3%.