In a significant move that underlines the growing demand for alternative energy sources in Europe, QatarEnergy, the state-owned energy company of Qatar, has announced a groundbreaking 27-year natural gas supply agreement with the Italian energy giant Eni. Under the terms of the agreement, Qatar will provide one million tonnes of natural gas annually to Italy, further solidifying the Gulf emirate’s role as a pivotal player in the global energy market.
The agreement between Qatar and Eni builds upon a prior partnership between the two companies. Last year, Eni inked a deal with QatarEnergy for a 3.1 percent share in Qatar’s North Field East project. This venture is part of Qatar’s ambitious expansion into the vast North Field, the world’s largest natural gas field, which extends into Iranian territory. The culmination of these endeavors will see liquefied natural gas (LNG) deliveries to Italy’s Tuscany region commencing in 2026.
Both QatarEnergy and Eni are enthusiastic about the newfound partnership. Eni, headquartered in Rome, stated that this deal “strengthens” its relationship with QatarEnergy and aligns with their strategic shift towards an increased reliance on natural gas. Qatar’s Energy Minister, Saad al-Kaabi, expressed his satisfaction, emphasizing the longevity and the potential of the partnership. He highlighted that the collaboration will “demonstrate commitment to the European markets in general, and to the Italian market in particular.”
This latest agreement is part of a broader trend where European nations are actively seeking to reduce their dependence on Russian natural gas following Moscow’s invasion of Ukraine. The quest for energy independence has pushed European countries to diversify their energy sources and secure alternative long-term supply agreements. Qatar’s 27-year deal with Italy’s Eni follows similar agreements with other major European energy companies.
Notably, last week, Qatar announced a similar 27-year natural gas supply deal with Royal Dutch Shell, while earlier in the same month, France’s Total also secured a contract of the same duration. As part of its North Field expansion project, Qatar aims to increase its LNG output significantly, potentially boosting production by over 60 percent to 126 million tonnes annually by 2027.
These landmark agreements, including the deal with Eni, have set a new industry standard. With the involvement of European heavyweights and significant players from around the world, Qatar’s prominence in the global LNG market is solidified. Notably, China National Petroleum Corporation and China’s Sinopec both signed similarly lengthy 27-year agreements with Qatar in recent years. Moreover, U.S. energy giants ConocoPhillips and ExxonMobil have also joined forces with Qatar in the expansive North Field project, contributing to the emirate’s growing influence in the LNG sector.
Qatar has long been a dominant player in the liquefied natural gas market, competing with countries like the United States, Australia, and Russia. QatarEnergy estimates that the North Field contains approximately 10 percent of the world’s known natural gas reserves, underscoring the nation’s importance as a reliable supplier of natural gas to a global clientele.
(Source: AFP)
