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Qatar has agreed to supply Italian firm Eni with natural gas for 27 years, the Gulf emirate's state-owned energy company announced Monday. The deal comes after similar contracts with France and the UK.
Doha will supply one million tonnes of gas a year under the deal, QatarEnergy said, following an agreement with Eni for a share of Qatar's huge North Field gas expansion project.
In the wake of Moscow's invasion of Ukraine last year, European nations have rushed to replace lost deliveries of natural gas from Russia.
"Today, we are taking another important step in strengthening our partnership with Eni that will foster our mutual cooperation for many years to come," Qatari Energy Minister Saad al-Kaabi said in a press release.
Eni signs a long-term deal to receive liquefied natural gas from Qatar for delivery to Italy, marking the Gulf nation’s third major contract with a European oil firm this month https://t.co/uHe28h5aGr
— Bloomberg (@business) October 23, 2023
"Together, we will continue to demonstrate commitment to the European markets in general, and to the Italian market in particular," he added.
In June last year Eni agreed a deal with QatarEnergy for a 3.1 percent share in Qatar's North Field East project, the first phase of the Gulf emirate's expansion into the largest gas field on the planet, which extends into Iranian territory.
Deliveries of liquified natural gas (LNG) to Italy's Tuscany region are expected to begin in 2026.
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In a statement, Rome-headquartered Eni said the deal "strengthens" its partnership with QatarEnergy, adding involvement in North Field East was "in line with Eni's transition strategy, which aims to progressively increase the role of gas".
Other European deals
The deal with Eni follows a quick succession of historically long agreements with European firms for gas supply from Qatar.
Last week, Qatar announced a deal for 27 years with Britain's Shell and earlier in the month, France's Total announced another deal of equal length.
Under its North Field expansion, Qatar is set to raise its LNG output by 60 percent or more to 126 million tonnes a year by 2027.
The main market for Qatari gas has traditionally been Asia, led by countries like China, Japan and South Korea.
The deals with Eni, Shell and Total are the same length as those agreed by the China National Petroleum Corporation in June and China's Sinopec in 2022. All have set a benchmark as the longest in the LNG industry.
US giants ConocoPhillips and ExxonMobil have also signed deals to partner in the expansion.
Qatar is one of the world's top LNG producers, alongside the United States, Australia and Russia.
QatarEnergy estimates the North Field holds about 10 percent of the world's known natural gas reserves.
Substitutes for Russian gas
Serious discussions to find substitutes for Russian gas started on the eve of Russia's invasion of Ukraine, in February 2022.
Then, the threat of disruptions to Europe's gas supply from Russia as a likely result of western sanctions prompted a debate about the need for long-term LNG contracts.
In the beginning of 2022, The United States already asked Qatar and other major gas producers whether they could send extra gas to Europe in case Russian flows were disrupted.
(With newswires)