Qatar Petroleum has signed a sale and purchase agreement to directly supply China with 600,000 metric tons of liquefied petroleum gas (LPG) per year for a period of five years.

The long-term agreement was inked by Qatar Petroleum for Sale of Petroleum Products Company (QPSPP) and Oriental Energy (Singapore), with the contract scheduled to start in January 2019.

“We hope this deal will further enhance our energy relationship with China, as we place greater importance to meeting the needs of the world’s largest growing LPG market,” Saad Sherida Al-Kaabi, President & CEO of Qatar Petroleum, said.

Qatar Petroleum announces a 5-year LPG supply agreement with China’s Oriental Energy#QP #QatarPetroleum #Qatar #Energy #China #LPG https://t.co/488qgZzeG1 pic.twitter.com/PRvz9dpMkv

— Qatar Petroleum (@qatarpetroleum) October 16, 2018

“Through this first step, we hope to build a strong and sustainable relationship with Qatar Petroleum and to continue exploring other areas in which Qatar Petroleum and Oriental Energy can further collaborate on,” Yan Jia Sheng, Vice-President of Oriental Energy Group and Managing Director of Oriental Energy (Singapore) International Trading, commented.

Oriental Energy (Singapore) is a subsidiary of Oriental Energy which is China’s largest LPG player with the largest LPG distribution network and LPG storage facilities in China. In addition, it has five LPG importing terminals along with several petrochemical facilities.

The LPG industry continues to enjoy sustainable growth in China where LPG is used for domestic use and the growing petrochemical sector.

The recent agreement comes amid a trade dispute between China and the United States. As Chinese importers of LPG have started to pay higher tariffs for LPG originating from the US, they are looking for alternatives.

For Qatar, the trade war could be an opportunity to boost its gas output to China.