QatarEnergy & Shell secure 27-year LNG supply agreement to the Netherlands

Qatar has made further strides in securing its long-term gas supply to Europe by finalizing a gas supply agreement with the Netherlands. The deal, which spans over 27 years, will see Qatar provide the Netherlands with 3.5 million metric tons of liquefied natural gas (LNG) annually.

Two significant LNG sale and purchase agreements have been signed by affiliates of QatarEnergy and Shell, replicating a similar deal struck with TotalEnergies just a week ago.

The LNG, sourced from the extensive North Field LNG production expansion project, is set to be delivered to the Gate LNG terminal located at the Port of Rotterdam commencing in 2026.

QatarEnergy confirmed, “The LNG volumes will be sourced from the two joint ventures between QatarEnergy and Shell that hold interests in Qatar’s North Field East (NFE) and North Field South (NFS) expansion projects.”

Shell’s involvement encompasses a 6.25% stake in the North Field East project and a 9.375% share in the North Field South project.

This agreement follows a parallel deal between QatarEnergy and TotalEnergies, marking Qatar’s most substantial and long-term gas supply agreement with Europe to date.

While Asia has demonstrated a substantial appetite for securing long-term sales and purchase agreements, Europe has lagged in securing supply from Qatar’s two-phase expansion strategy. This expansion aims to boost liquefaction capacity from 77 million metric tons per year to 126 million by 2027.

Over the past year, QatarEnergy has entered into deals to supply LNG from the expansion to Asian buyers, including agreements with China’s Sinopec and China National Petroleum Corporation (CNPC).

Qatar, renowned as the world’s foremost LNG exporter, has become an increasingly sought-after source of LNG, particularly in light of the conflict in Ukraine. Europe, in particular, is in critical need of LNG to offset the shortfall resulting from the reduction of Russian pipeline gas, which historically constituted nearly 40% of the continent’s imports.

Saad al-Kaabi, the CEO of QatarEnergy, emphasized that these agreements underscore Qatar’s dedication to meeting Europe’s energy needs while reinforcing energy security through a source known for its economic and environmental benefits.