Italy's Eni joins TotalEnergies, Shell in locking in new Qatari LNG supply for Europe

Italy's Eni has signed a long-term LNG deal with QatarEnergy to take up to 1 million mt/year of Qatari LNG for delivery to Italy starting in 2026, QatarEnergy said Oct. 23.

The sale and purchase agreement is for a term of 27 years and the supplies will come from Eni's stake in Qatar's North Field East LNG expansion project that totals 32 million mt/year, QatarEnergy said in a statement. The LNG will be delivered to the FSRU Italia, a floating storage and regasification unit located in the port of Piombino, in Italy's Tuscany region.

Eni in a separate statement put the volume at up to 1.5 Bcm/year. The Italian energy company is already importing 2.9 Bcm/year from Qatar under a long-term supply agreement that started in 2007.

"Our partnership with Eni has borne fruitful results including LNG deliveries through the Fluxys LNG terminal in Belgium's Zeebrugge port and upstream exploration projects in various locations around the world," QatarEnergy CEO Saad al-Kaabi said. "This agreement further builds on Eni's first entry in the upstream sector in the state of Qatar through our partnership in the historic North Field East expansion project."

TotalEnergies and Shell are the other equity holders in the expansion project that have locked in new supplies from the expansion project in the past two weeks. ConocoPhillips, Chinese companies CNPC and Sinopec and Bangladesh's Petrobangla have also signed LNG supply contracts from the expansion. ExxonMobil is the only equity holder without a new supply deal.

QatarEnergy on Oct. 3 broke ground on the massive North Field expansion project, which is designed to raise Qatar's LNG production capacity from the current 77 million mt/year to 126 million mt/year. The expansion will see the construction of six new mega trains each with a production capacity of 8 million mt/year -- four as part of the North Field East project and two as part of North Field South.

Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price at an all-time high of Eur319.98/MWh on Aug. 26, 2022. Curtailed Russian pipeline flows and a summer rush to fill storage sites across Europe after the introduction of EU-mandated filling targets helped drive prices to last year's record levels.

Prices are now lower thanks to healthy storage levels and demand curtailments but remain historically high, with Platts assessing the TTF month-ahead price on Oct. 20 at Eur50.33/MWh.