QatarEnergy has signed a 10-year agreement with ENOC, the UAE's national oil company, to supply up to 120 million barrels of oil condensates. The deal comes amid warming ties between the two Gulf states following a diplomatic rift in 2017.
Under the terms of the deal:
• QatarEnergy will supply the condensates through its subsidiary PSPP.
• ENOC will offtake the condensates through its unit ENOC Supply & Trading.
• The initial volume is up to 120 million barrels but the parties can increase the volume further.
• Supply is set to commence this month and will extend for 10 years.
The agreement is a sign of stronger economic cooperation between Qatar and the UAE. Qatar's Energy Minister Saad al-Kaabi said the deal "further strengthens QatarEnergy's relationship with ENOC, which extends back to 2008."
The UAE reopened its embassy in Qatar in January 2021 following the resolution of the Gulf diplomatic crisis. Since then, high-level visits and discussions have taken place to improve bilateral ties and promote economic growth.
For both countries, the deal also comes at a time when they are seeking to expand their oil and gas production capacity. Qatar aims to raise its LNG export capacity by over 60% with new projects, while the UAE seeks to diversify its oil-dependent economy.
The condensate supply agreement fits into both countries' economic growth strategies and signals a closer partnership going forward.
