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Agreements Signed by Qatar Gas and Qatar Petroleum with Shell to Boost LNG Productions & Supply

18 June 2017 / by Anish Jonathan Rao (author)
Picture of liquefied natural gas carrier Al-Shamriya (photo: )
Picture of liquefied natural gas carrier Al-Shamriya

Two major agreements have been signed by Qatar Gas and Qatar Petroleum with Shell in order to boost Liquid Natural Gas (LNG) production and take the already existing partnership to a different level.

Although both the agreements signed by the two Qatari state owned companies was for different purpose the sole aim of the agreement is to further strengthen relationship with Shell which is the largest energy traders in the world.

State-owned QatarGas New Sale and Purchase (SPA) deal with Shell:

According to the statement published in the QatarGas Website , a new sale and purchase deal has been signed  on June 18 by the state owned QatarGas and Shell that will pave a path for the latter to receive 1.1 million tonnes of Liquefied Natural Gas (LNG) per annum for the next five years.

Commencing in January 2019, the sales and purchase agreement provides for the supply of LNG from Qatar Liquefied Gas Company Limited (4) (“Qatargas 4"), a joint venture between Qatar Petroleum (70%) and Shell (30%).  It is expected that the LNG will be delivered to either the Dragon LNG Terminal in the United Kingdom or the Gate LNG Terminal in the Netherlands. 

Qatar Petroleum's Agreement with Shell:

A framework agreement was signed on June 14 by Qatar Petroleum and Shell that will expedite the process of developing liquefied natural gas marine fueling or bunkering fueling across the globe. In the light of shipping companies being obliged to reduce sulfur emissions and not cross the 0.5% cap from 2020, LNG has come to limelight given the fact that it is indeed a clean source of energy. The framework agreement has been signed after two earlier memoranda of understanding (MoUs) in 2016.

 

CEO of Qatar Petroleum and Shell Saad Sherida Al-Kaabi and Ben van Beurden,

CEO of Qatar Petroleum and Shell Saad Sherida Al-Kaabi and Ben van Beurden,

Both these deals are also seen as a boost for Asia’s gas-consuming economies which faces growing supply overhang. The remaining GCC countries (including UAE) had severed ties with Qatar on June 5, 2017 on the grounds that it was getting too close to Shia Muslim Iran which is seen a regional rival. However, this is not seen as a reason for Qatar to stop supplying LNG to the UAE, as the Qatari’s are entitled to follow a "force majeure" clause in its contract with the UAE. Nevertheless, as for now it is quite clear that LNG is one of the most viable clean sources of energy that has the potential to play a vital role in developing economies in the years to come. 

The author

Anish Jonathan Rao

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