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TotalEnergies has signed a 27-year agreement with Qatar to secure liquefied natural gas, extending France’s commitment to fossil fuels beyond 2050 in one of longest ever LNG supply deals.
Qatar will supply up to 3.5mn tonnes of LNG to France a year from 2026 at an undisclosed price, with the deliveries expected to continue until 2053, making it the Gulf state’s largest and longest deal with Europe.
The contract highlights France’s reliance on carbon-emitting power, despite its aim to reach net zero emissions in 2050.
It also underlines tensions between Europe’s need for energy security and its aim to cut its reliance on fossil fuels to meet the continent’s environmental ambitions.
Qatar has supplied France with LNG since 2009 but European demand for the fuel has increased since Russia’s invasion of Ukraine.
Although France was less dependent on Russian gas than Germany, the war has forced a rethink over its approach to LNG.
LNG flows to France have risen rapidly since the invasion in February 2022, up 102 per cent last year, according to gas grid GRDF.
France was the fourth-largest importer of LNG in the world in 2022, behind Japan, China and South Korea, according to figures from market intelligence company ICIS.
LNG produces 50 per cent less carbon dioxide than coal for the same amount of energy when burnt, and 30 per cent less than oil.
However, it remains a significant source of emissions, meaning France would have to offset any LNG still being burnt in 2050 in order to achieve its net zero target.
President Emmanuel Macron has launched a major drive to lean on low carbon nuclear energy as part of that target, with a €52bn programme to construct at least six new reactors.
In addition, France is trying to speed up its rollout of renewables, which has lagged behind that of its European neighbours.
Qatar has recently signed 27-year deals with Chinese companies Sinopec and China National Petroleum Corporation, but this is the first such deal with Europe, according to Alex Froley, an LNG analyst at ICIS, an energy market intelligence company.
“The deal helps to secure a large portion of gas supply for France’s households, power plants and industry in coming decades,” he added.
It follows a 15-year deal between German utilities groups Uniper and RWE with Qatar to secure 2mn tonnes of LNG a year, announced in November — the first long-term agreement for LNG supplies to an EU country since the Ukraine war began.
French gas group Engie last year signed a 15-year LNG supply deal with Houston-based NextDecade, after previously shunning such a deal because the French government, its 24 per cent shareholder, had raised environmental concerns about such an agreement.
The latest contracts between Total and state-owned QatarEnergy will be mainly skewed towards the French market. Total, which has had close ties with Qatar for years, was the first international major to be chosen as a partner for the big North Field East LNG project last December.
About 16 per cent of France’s energy consumption comes from gas, with about 40 per cent of that going to household heating.
France has four LNG import terminals and is planning a new floating one by the northern port of Le Havre.
The LNG will come from two joint ventures between QatarEnergy and Total: North Field East project, in which the French major holds a 6.25 per cent stake, and North Field South, in which Total has a 9.37 per cent holding. The 3.5mn tonnes is “effectively Total’s share of the output” of these sites, Froley said.
Saad Sherida Al-Kaabi, Qatar’s energy minister, said: “These two new agreements we have signed with our partner TotalEnergies demonstrate our continued commitment to the European markets in general, and to the French market in particular, thus contributing to France’s energy security.”
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