QatarEnergy and China’s Sinopec has signed a 27-year LNG supply deal in the longest LNG agreement to date as uncertainty in the energy markets pushes buyers to look for long-term supplies. Competition for LNG has become much fiercer since Russia invaded Ukraine in February, as Europe looking to buy huge amounts of the fuel to help phase out Russian pipeline gas, which used to account for 40% of Europe’s gas imports. Qatar’s Minister of Energy and CEO of QatarEnergy Kaabi said European companies wanting to buy LNG needed to look at how Asian buyers were approaching their own negotiations and were willing to lock into long-term deals.

“Today is an important milestone for the first sales and purchase agreement (SPA) for North Field East project, it is 4 million tonnes for 27 years to Sinopec of China,” Kaabi said.

“It signifies long-term deals are here and important for both seller and buyer,” he said in an interview, adding that the deal was the LNG sector’s largest single sales and purchase agreement on record.

The North Field is the world’s biggest gas field. Qatar shares it with Iran.

QatarEnergy earlier this year signed five deals for North Field East (NFE), the first and larger of the two-phase North Field expansion plan, which includes six LNG trains that will ramp up Qatar’s liquefaction capacity to 126 million tonnes per year by 2027 from 77 million.

The company also signed later contracts with three partners for North Field South (NFS), the second phase of the expansion.

The deal signed with Sinopec marks the first of its kind to be announced for NFE.

“This takes our relationship to new heights as we have an SPA that will last into the 2050s,” Kaabi said.

“It sends a message that a lot of Asian buyers are actually approaching us to have a long term deal because they see the volumes of gas that are coming in the future are less and less.”

Kaabi added that negotiations with potential European and Chinese buyers that want security of supply were ongoing.

Qatar, which is already the world’s largest LNG exporter, will strengthen its position after North Field expansion projects are completed. Europe hopes expansions will help guarantee long term supplies of gas to the continent as it looks to replace Russian gas.

“The recent volatility has driven buyers to understand the importance of having long-term supply that is fixed and that’s reasonably priced for the long term”,” Kaabi said.

“There aren’t many projects that are taking final investment decision and the next two big chunks of LNG capacity that are coming into the market is Golden Pass LNG that we partnered with ExxonMobil in Texas and the next big chunk if you will is North Field East and North Field South.”

The pricing of the Sinopec deal will be similar to others in the past that were linked to crude oil.

“The way we’re pricing our deals with Asia is crude linked. We’ve done it this way in the past and that’s the mechanism we’re using going forward.”

QatarEnergy will provide the shipping and delivery of the LNG as part of the agreement.

Kaabi added negotiations for an equity stake in Qatar’s expansion project were ongoing with several entities.

The supply contract is a key component for an integrated partnership in the NFE, Sinopec said in a statement, indicating it could be involved in stake negotiations.

China’s national oil majors have been in advanced talks with Qatar to invest in NFE.