France Latest to Secure Long-Term LNG Contract with Qatar Spanning 27 years
10.13.2023 By Tank Terminals - NEWS

October 13, 2023 [Doha News]- TotalEnergies maintains a 6.25% share in the NFE project and a 9.375% share in the NFS project.


Qatar will deliver a major supply of liquefied natural gas (LNG) to France’s TotalEnergies over 27 years, an announcement from the Qatari energy giant confirmed.

QatarEnergy is set to deliver a massive 3.5 million tonnes of LNG to France annually through two long-term agreements, QatarEnergy said.

The LNG volumes will be sourced from the two joint ventures between QatarEnergyand TotalEnergies that hold interests in Qatar’s North Field East (NFE) and North field South (NFS) projects, a press release said.

“These two new agreements we have signed with our partner TotalEnergies, demonstrate our continued commitment to the European markets in general, and to the French market in particular, thus contributing to France’s energy security,” energy minister and QatarEnergy CEO Saad Sherida Al-Kaabi said.

“The State of Qatar has been supplying the French market with LNG since 2009, and the new agreements reflect the joint effort of two trusted partners, QatarEnergy and
TotalEnergies, to provide reliable and credible LNG supply solutions to customers
across the globe,” he added.

The agreement is the European continent’s most substantial supply contract and comes as it scrambles to secure supplies to shed its dependence on Russian gas.

The deal appears to showcase willingness by European countries to gradually overcome reservations about long-term gas contracts, as energy security becomes a primary concern.

“Our commitment to ensure continued and reliable supplies of energy to Europe and the rest of the world is underpinned by our substantial and ongoing investments across the entire gas value chain,” Al Kaabi added.

“We are proud that our new LNG expansion in Qatar is the least carbon intensive project in the world. Our efforts span from bolstering production capacity in Qatar to the development of the Golden Pass LNG export project in the United States, in addition to our commitments in various LNG receiving terminals in Europe, including the Montoir-de-Bretagne LNG Terminal in France.”

Qatar has recently struck some of its longest deals with China, attaining a 27-year agreement earlier this year with China National Petroleum Corp. As a top exporter of LNG, Qatar depends on long-term contracts to support its extensive LNG production expansion.

With France striving to reach net zero emissions by the year 2050, this pact underscores the importance of deploying technologies such as carbon capture and storage in their gas consumption, reports detailed.

Meanwhile, France has ambitious plans to more than double its renewable power capacity by 2035, integrating unprecedented amounts of solar and wind power to achieve carbon neutrality by 2050.

Gas, however, remains a significant part of the equation for home heating, building heating, and industrial processes. Government data from last year indicated that gas accounted for 18% of France’s final energy consumption.

In 2022, France stood as the fourth largest LNG importer globally, with overall purchases reaching 26 million tons, trailing behind Japan, China, and South Korea, according to ICIS LNG analyst Alex Froley.

The new agreement will reshape France’s LNG supply mix, as Qatar’s share is set to increase. In the previous year, France imported just 6% of super-chilled fuel from Qatar, whereas 45% came from the United States.

Under these deals, LNG from Qatar will be delivered ex-ship to the Fos Cavaou LNG receiving terminal in the south of France, with deliveries expected to begin in 2026, as per QatarEnergy.

TotalEnergies maintains a 6.25% share in the NFE project and a 9.375% share in the NFS project.

Qatar’s multi-billion North Field expansion project is the largest of its kind and is leading the country’s drive to dominate LNG supplies.

The minister had previously stated in May that Qatar aimed to secure all long-term LNG contracts arising from the North Field expansion’s two phases by the end of the current year.

Last month, Al Kaabi said Qatar’s LNG sales from the North Field expansion project are “going very well” and could be sold out by the end of this year.


Qatar’s LNG ambitions

QatarEnergy LNG, formerly known as Qatargas, is at the forefront of the country’s ambitious LNG expansion plans, boasting 14 LNG production trains currently in operation.

The project is broken into two parts, the NFE and the NFS.

The first is set to ramp up Qatar’s production from 77 to 110 million tonnes per annum as the NFS will increase the production capacity from 110 to 126 million tonnes per annum.

QatarEnergy announced eight international partnership agreements last year for both phases of the projects, set to kick start in 2026 and 2027.

In a bid to amplify its global footprint, the Gulf state has unveiled ambitious plans to sign a record volume of long-term LNG contracts, with a specific focus on engagement with Asian nations.

Already a prominent global LNG exporter, Qatar has set a lofty target of contributing 40% of the world’s LNG output by 2029, affirming its status as an energy powerhouse on the global stage.

Qatar holds long-term contracts with Asian buyers, which mainly include China, India, Japan and South Korea.


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