Qatar Signs Long-Term LNG Supply Deals With France 

France’s TotalEnergies SE has agreed to buy liquefied natural gas from Qatar for 27 years, cementing the European nation’s commitment to fossil fuels beyond 2050.

(Bloomberg) — France’s TotalEnergies SE has agreed to buy liquefied natural gas from Qatar for 27 years, cementing the European nation’s commitment to fossil fuels beyond 2050.

QatarEnergy will deliver as much as 3.5 million tons of LNG to France annually under two long-term agreements, the Qatari energy giant said in a statement. France needs to cut emissions to reach net zero by the middle of the century, so burning gas will need technology like carbon capture and storage to fit with that target. 

It’s one of the longest and biggest supply accords, underpinning Europe’s reliance on LNG to replace Russian pipeline gas. France made a U-turn on long-term LNG deals last year, when it revived a supply accord with a US producer which it had axed in 2020. The deal with Qatar shows that European nations are slowly overcoming resistance to long-running gas contracts as energy security concerns displace the transition away from fossil fuels on political agendas. 

“This agreement points to a degree of confidence regarding the long-term role of gas in the European energy supply stack,” said Energy Aspects Ltd. analyst Leo Kabouche. “With the loss of Russian pipeline gas and projections of much higher power demand to achieve decarbonisation goals, there is a sense that stable LNG flows to Europe will be needed.”

Some of the longest deals signed by Qatar recently have been with China — a 27-year agreement between QatarEnergy and China National Petroleum Corp. clinched earlier this year. Qatar, already a top exporter of the fuel, needs long-term deals to support its huge LNG output expansion.

Reliance on Gas

France aims to more than double its renewable power capacity by 2035, bringing unprecedented amounts of solar and wind power online to become carbon neutral by 2050. But it’s still using a lot of gas for home and building heating, as well as industrial processes. Gas accounted for 18% of France’s final energy consumption last year, according to government data.

The country was also the fourth biggest LNG importer in the world in 2022 — with overall purchases at 26 million tons, lagging behind only Japan, China and South Korea, according to Alex Froley, ICIS LNG analyst.

The deal could also alter France’s LNG supply mix, Froley said. Last year, the country took only 6% of super-chilled fuel from Qatar, while 45% came from the US.

Read more: Uniper Secures LNG Until Late 2030s to Feed European Demand

Under the new deals, LNG from Qatar will be delivered ex-ship to the Fos Cavaou LNG receiving terminal in southern France, with deliveries expected to start in 2026, QatarEnergy said.

The LNG volumes will be sourced from the two joint ventures between QatarEnergy and TotalEnergies that hold interests in Qatar’s North Field East and North Field South projects. TotalEnergies has a 6.25% share in the NFE project and a 9.375% share in the NFS project.

“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,” said Saad Sherida Al-Kaabi, Qatar’s energy minister. 

“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,” he said.

–With assistance from Omar Tamo and Francois de Beaupuy.

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