Qatar signs a 27-year gas agreement with British Shell

Qatar has agreed to supply British company Shell with natural gas for 27 years, the state-owned energy company of the Persian Gulf emirate announced this morning. Since Russia invaded Ukraine, European countries have been scrambling to replace lost supplies natural gas from Russia.

Under the deal, Qatar will supply 3,5 million tonnes of gas annually, QatarEnergy said after two deals with Shell to participate in the Gulf state's massive North Field gas expansion project.

“We are delighted to have signed two long-term LNG sales and purchase agreements with Shell, which will further strengthen our decades-long relationship and strategic partnership in Qatar and around the world.” – said Qatari Energy Minister Saad al-Kaabi.

“These agreements reaffirm Qatar's commitment to meeting Europe's energy needs and strengthening its energy security from a source known for its excellent economic and environmental values.” - added.

This is not the first agreement of this type

In October last year Shell signed an agreement with QatarEnergy for a 9,4% stake in the Qatari North Field South project, which is the second stage of the expansion of the world's largest gas field, which stretches under the Persian Gulf on Iranian territory. In July of the same year, it also agreed to a 6,25% share in the first phase of the North Field East expansion.

Liquefied natural gas (LNG) deliveries to Rotterdam are expected to start in 2026. The length of the contract with Shell is equal to the contract with the French company TotalEnergies announced earlier this month for the supply of natural gas for 27 years. As part of the North Field expansion, Qatar is expected to increase liquefied natural gas (LNG) production by at least 60 percent to 126 million tonnes per year by 2027. The main market for Qatari gas has traditionally been in Asia, led by countries such as China, Japan and South Korea.

The length of the agreement with Shell and Total is also the same as the agreement concluded by China National Petroleum Corporation in June and China's Sinopec in 2022. They all set the benchmark as the longest in the liquefied gas industry. US giants ConocoPhillips and ExxonMobile have also signed expansion partnerships.

Qatar is one of the largest LNG producers in the world, along with the United States, Australia and Russia. QatarEnergy estimates that the North Field field holds approximately 10 percent of the world's known natural gas reserves.