QatarEnergy signs long-term LNG supply contract with France

State-owned QatarEnergy and France’s TotalEnergies have signed two 27-year contracts for the supply of liquefied natural gas (LNG), with a combined volume of up to 3.5 million tonnes per year, Argus media and Bloomberg reported. The contracts will take effect in 2026, making France the first European country to secure natural gas supplies beyond 2050, when the European Union plans to achieve carbon neutrality.

TotalEnergies SE has agreed to buy liquefied natural gas from Qatar for 27 years, committing to the use of fossil fuels beyond 2050. QatarEnergy will supply France with up to 3.5 million tonnes of LNG per year under two long-term contracts, the Qatari energy company said in a statement.

The LNG will be delivered to a receiving terminal in southern France from Qatar’s North Field East (NFE) and North Field South (NFS) projects, in which the French company holds stakes. TotalEnergies owns 6.25 percent of the NFE project and 9.375 percent of the NFS project.

"Qatar has been supplying LNG to the French market since 2009. The agreements we have signed demonstrate our continued commitment to European markets in general and the French market in particular, contributing to France’s energy security," said Qatari Energy Minister and QE CEO Saad al-Kaabi.

This is one of the largest and longest-lasting gas supply contracts, reinforcing Europe’s reliance on LNG as a substitute for Russian pipeline gas. France reconsidered its position on long-term LNG supply contracts last year, when it renewed an agreement with a US producer that it had cancelled in 2020. The agreement with Qatar shows that European countries are returning to long-term gas supply contracts, with energy security their main concern.

 "This agreement suggests a degree of confidence in the long-term role of gas in Europe. With Russian pipeline gas supplies disrupted and forecasts pointing to much higher electricity demand to meet decarbonisation targets, a steady flow of LNG to Europe appears necessary."

Source: ENGIE: Fos Cavou LNG terminal, France

This year, Qatar also signed a long-term contract with China. Specifically, QatarEnergy and China National Petroleum Corp agreed on LNG supplies under another 27-year contract. Qatar, already a leading gas exporter, is concluding these long-term deals to support further investment in production and the expansion of LNG terminals.

Achieving carbon neutrality targets

France remains heavily reliant on gas for heating homes and buildings and for industrial processes. Government data show that gas accounted for 18 % of total energy consumption last year. France was also the world’s fourth-largest LNG importer in 2022, with total purchases of 26 million tonnes, behind countries such as Japan, China and South Korea.

This move also shows how France intends to achieve its net-zero target. France has set an ambitious plan to more than double installed renewable energy capacity by 2035 and expand the use of solar and wind power. However, the use of natural gas will require technologies such as carbon capture and storage to achieve this goal.