Qatargas recently announced it has signed a Sales and Purchase Agreement (SPA) to supply 2m tonnes per annum (mtpa) of liquefied natural gas (LNG) to the China National Offshore Oil Corporation (CNOOC), under a 25-year-long-term agreement.

The agreement was signed for Qatargas by the Deputy Prime Minister and Minister of Energy and Industry H E Abdullah bin Hamad Al Attiyah and comes at a time when Qatargas is undergoing a major expansion programme.

The LNG will be delivered to five terminals in China, notably the Fujian LNG Terminal and Guangdong LNG which are already operational, with the Shanghai LNG Terminal to start in 2009. The supplies will also go to Zhejian LNG and Hainan LNG Terminals when they become operational.

The terminals will be capable of receiving the cargoes using the new Q-Flex and Q-Max class of vessels. CNOOC intends to use the LNG to supply mainly local industry, city gas and commercial power companies.

Faisal M Al Suwaidi, Chairman and CEO of Qatargas Operating Company, commented, “LNG has a key role to play in helping governments around the world improve the diversity of their energy supplies. Qatargas is pleased with this exciting development which builds on earlier agreements to supply LNG to meet the growing demand for energy in China.”

Fu Chengyu, CNOOC President, was equally enthusiastic and said, “I am pleased that CNOOC has reached an agreement with Qatargas. I believe the deal will further enhance the cooperation between Qatar, one of the largest LNG producers and China, which is believed to be the largest potential market for gas. I am confident that this deal will benefit both parties.”

Qatargas is constructing four new LNG processing trains which will see an increase of LNG production from 10 mtpa today to 42 mtpa by the end of the decade.