Qatar announces 27-year gas deal with Italy's Eni

AFP , Monday 23 Oct 2023

Qatar has agreed to supply Italian firm Eni with natural gas for 27 years, the Gulf emirate's state-owned energy company announced Monday, the latest in a series of major deals.

QATAR
file photo shows a Qatari liquid natural gas (LNG) tanker ship being loaded up with LNG, made up mainly of methane, at Raslaffans Sea Port, northern Qatar. AP

 

Doha will supply one million tonnes of gas a year under the deal, QatarEnergy said, following an agreement with Eni for a share of Qatar's huge North Field gas expansion project.

In the wake of Moscow's invasion of Ukraine last year, European nations have rushed to replace lost deliveries of natural gas from Russia.

"Today, we are taking another important step in strengthening our partnership with Eni that will foster our mutual cooperation for many years to come," Qatari Energy Minister Saad al-Kaabi said.

"Together, we will continue to demonstrate commitment to the European markets in general, and to the Italian market in particular," he added.

In June last year Eni agreed on a deal with QatarEnergy for a 3.1 percent share in Qatar's North Field East project, the first phase of the Gulf emirate's expansion into the largest gas field on the planet, which extends into Iranian territory.

Deliveries of liquefied natural gas (LNG) to Italy's Tuscany region are expected to begin in 2026.

In a statement, Rome-headquartered Eni said the deal "strengthens" its partnership with QatarEnergy, adding involvement in North Field East was "in line with Eni's transition strategy, which aims to progressively increase the role of gas".

The deal with Eni follows a quick succession of historically long agreements with European firms for gas supply from Qatar.

Last week, Qatar announced a deal for 27 years with Britain's Shell and earlier in the month, France's Total announced another deal of equal length.

Under its North Field expansion, Qatar is set to raise its LNG output by 60 percent or more to 126 million tonnes a year by 2027.

The main market for Qatari gas has traditionally been Asia, led by countries like China, Japan, and South Korea.

The deals with Eni, Shell, and Total are the same length as those agreed by the China National Petroleum Corporation in June and China's Sinopec in 2022. All have set a benchmark as the longest in the LNG industry.

US giants ConocoPhillips and ExxonMobil have also signed deals to partner in the expansion.

Qatar is one of the world's top LNG producers, alongside the United States, Australia, and Russia.

QatarEnergy estimates the North Field holds about 10 percent of the world's known natural gas reserves.

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