The 27 Club
Who wants to place a wager on what the world will look like in 2050?
“Where are the feasts we were promised? Where is the wine, the new wine, dying on the vine.” – Jim Morrison
How much gas will the world need in 27 years’ time? This question matters not just because it takes us to the feted mid-century point by which many countries have pledged to achieve ‘net zero’ emissions. For Shell and TotalEnergies, the answer will determine whether their latest bold bets on liquefied natural gas pay off.
The European oil companies have each signed separate 27-year sales and purchase agreements (SPAs) with QatarEnergy for 3.5 million tonnes per annum of LNG, to be supplied from Qatar’s North Field East and South expansion projects in the Persian Gulf. These deals follow similar 27-year contracts signed by China’s Sinopec and CNPC to buy even larger volumes from Qatar’s mega-expansion (4 mtpa apiece). These are the longest LNG SPAs ever signed, and they boggle the mind.
Going so very long on the most expensive form of gas at this point in the energy transition says…