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    Qatar Extends Zeebrugge Rights to 2044 (Update)

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by: William Powell

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Qatar Extends Zeebrugge Rights to 2044 (Update)

(Adds details of contracts at end)

Qatar Petroleum subsidiary Qatar Terminal (QTL) and Fluxys Belgium subsidiary Fluxys LNG have signed a long-term LNG services agreement for the Zeebrugge LNG terminal, they said September 2. Under the agreement, QTL is reserving unloading slots at the facility from the expiry of the current three long-term unloading contracts in 2024 and up to 2044.

The agreement was signed by Qatar Petroleum CEO Saad Sherida Al-Kaabi and his counterpart at Fluxys Belgium, Pascal De Buck.

Al-Kaabi said the agreement would "further support our customers in Belgium and Europe in general, by providing them access to reliable LNG supplies from Qatar and allowing them to maximise the utilisation of such supplies."

He added that Europe had long been a key LNG market for Qatar and said the state remained committed to "supporting the EU’s energy policies and to providing reliable energy supplies into Europe. I would like to take this opportunity to thank all the concerned Belgian authorities for their support and Fluxys for its valuable partnership.”

The European Commission has been examining Qatar's LNG delivery contracts for signs of anti-competitive behaviour, such as bans on redelivery, so far without publishing its findings.

De Buck said the deal was a "milestone for Fluxys Belgium. This agreement further extends our long-standing cooperation with Qatari partners, secures long-term activity at the Zeebrugge terminal and further strengthens the facility’s position as a versatile LNG gateway into Europe offering customers optimum destination flexibility. Ample pipe gas take away capacity from the terminal is readily available for delivery throughout northwest Europe as well as a range of options for downstream small-scale LNG distribution."

About a sixth of Belgium's gas demand is met by Qatar. 

During the subscription window held from April 30-May 24, the market was offered unloading slots and additional storage services at the facility over subsequent periods up to 2044. In late June, the Belgian federal commission for electricity and gas regulation approved the accompanying tariff and LNG services agreement proposals, clearing the way for turning the binding interest obtained through the subscription window into a long-term LNG services agreement.

The long-term LNG services agreement was the outcome of the subscription window. Fluxys said July 1 that all the capacity on offered had been sold. The price has been lowered, while demand is up, as northwest European gas production is falling, and demand for gas is expected to rise to meet the needs of the energy transition.

The Zeebrugge LNG Terminal in Belgium was commissioned in 1987.and now has 380,000 m³ capacity spread over four tanks and an annual throughput capacity of 9bn m³/yr. A fifth 180,000 m³ storage tank is being built and will allow Yamal LNG to transship LNG from its ice-class vessels to other vessels on the basis of a permanent booking. That is separate from the announced capacity deal.

A Fluxys spokesman said that there are three long-term contracts that would all expire between 2023 and 2028. Half the capacity was sold to ExxonMobil and Qatar, which has since been transferred to EDF Trading; the second was with Eni, formerly Distrigas; and the third, the smallest, was with French Engie. As they expire, they will be renewed with Qatar, which will be the sole capacity holder from 2028. It will have access rights to 110 slots/year. Under EU competition law, slots must be offered to third parties if the capacity holder is not planning to use them.