China’s $60bn deal with Qatar will keep gas on for 27 years

CHINA has signed one of the biggest gas supply deals on record as Beijing scrambles to bolster its energy supplies.

Officials have reached a $60bn (£51bn) agreement to buy liquefied natural gas (LNG) from Qatar, beginning in 2026. The deal, between Qatar Energy and state-owned Sinopec, will lead to four million tons of LNG being shipped to China annually over 27 years.

China was the world’s biggest importer of LNG in 2021, overtaking Japan. Beijing has been ramping up imports as it shifts away from the heavy use of coal for power generation.

LNG import volumes have fallen sharply this year as Beijing’s zero-covid policies shut the country off from global trade and disrupted industry.

However, demand for power picked up over the summer because of a heatwave. Residential electricity consumption rose 27pc in July, as households used air conditioning.

Sinopec’s LNG will come from Qatar’s North Field East expansion, which is backed by Shell and Exxon Mobil.

Qatarenergy chief Saad al-kaabi said: “Today is an important milestone for the first sales and purchase agreement for the North Field East project.

“It signifies long-term deals are here and important for both seller and buyer.” He added that the deal was the LNG sector’s “largest single sales and purchase agreement on record”.

Europe is looking for a similar accord with Qatar for long-term supplies of LNG – gas cooled into liquid so it can be shipped. Alternative fuel sources are sought as Europe weans itself off Russian gas, but the likes of Germany are unwilling to commit to long-term deals of the sort agreed by China.

These deals are less attractive to many Western countries because they lock them in over decades, at a time when most hope to cut their reliance on fossil fuels to meet climate goals.

LNG bound for Britain could be redirected to France. Paris requires more gas imports than initially forecast due to nuclear power plant outages.