Qatargas Signs Five-Year LNG Supply Contract with Shell

Image Courtesy: Qatargas

Doha-based liquefied natural gas company Qatargas has entered into a new sale and purchase agreement (SPA) to deliver up to 1.1 million tonnes of LNG per year to oil and gas conglomerate Shell for a period of five years.

Under the terms of the agreement, which is scheduled to commence in January 2019, the company will supply LNG from Qatar Liquefied Gas Company Limited (4) (Qatargas 4), a joint venture between Qatar Petroleum and Shell.

Qatargas said that the LNG is expected to be delivered to either the Dragon LNG Terminal in the United Kingdom or the Gate LNG Terminal in the Netherlands. ​

“We are pleased to have signed this agreement, strengthening our relationship with Qatargas. Agreements like this support our ability to provide reliable, flexible LNG supply to our customers. We strongly believe natural gas has a vital role to play in providing secure and cleaner energy for decades to come,” Maarten Wetselaar, Director of Integrated Gas at Shell, said.

“This deal provides Qatargas with access to Shell’s gas sales portfolio in the United Kingdom and continental Europe, as well as the flexibility to manage LNG deliveries to our global client portfolio,” Khalid Bin Khalifa Al-Thani, Chief Executive Officer, Qatargas, added.

The deal comes on the back of a crisis which saw a number of Arab countries cut diplomatic and trading ties with Qatar on June 5, leading to a suspension of all vessel traffic from and to the country by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt.

Aside to regional ports shunning Qatari vessels, the most immediate implications on the shipping sector, as anticipated by the Holman Fenwick Willan LLP law firm, include hampering of the purchase of Qatari crude and condensate, hindering of bunkering operations at major bunkering ports such as Fujairah and transshipment at local ports, along with difficulties related to crew.

Despite the crisis, Egyptian authorities seem to be allowing the transit of ships through the Suez Canal from/to Qatar. Namely, the LNG carrier Wilforce transited the waterway fully-loaded with Qatari LNG only days after the Arab countries severed ties with Qatar.

According to vessel tracking data from VesselsValue, the Norwegian-flagged LNG carrier loaded its cargo in Ras-Laffan, Qatar on May 29.

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