China and the EU will buy even more gas from Qatar to replace Russian gas

Chinese and European gas importers are increasing their purchases from Qatar.

According to Bloomberg, the Qatari state corporation QatarEnergy is preparing to sign new contracts for the supply of liquefied natural gas to China and the European Union.

One of the world's largest LNG exporters, QatarEnergy already has a 27-year contract with China's CPCC. After that, it is planning to sign a similar agreement with Sinopec, the second largest oil and gas company in China by production.

In addition, agreements are planned with European majors such as French TotalEnergies, Italian Eni, British-Dutch Shell, and American ConocoPhillips and ExxonMobil. All of them have previously received stakes in the North Field gas field, which will supply gas to their customers.

Qatari gas will replace Russian gas in Europe, which last year dropped to the levels of the Leonid Brezhnev era.

Gazprom pumped only 28 billion cubic metres to what was once its largest market, the lowest volume since 1975-80.

Gazprom sold slightly less – about 22 billion cubic metres – to China. In 2024, deliveries through the Power of Siberia may increase to about 30 billion cubic metres, but even when the pipeline is at full capacity – 38 billion cubic metres a year – it will only compensate for one fifth of previous exports to the European Union.

Putin offered China to increase gas imports to 100 bcm per year. However, two meetings with Chinese President Xi Jinping in March and October proved fruitless: Beijing did not sign a contract for the construction of Power of Siberia 2.

Background. As previously reported, China refuses to invest in the Russian gas pipeline project. The eastern country is also demanding further gas discounts from Russia.