On the opening day of the World Cup, what major event did China undertake in Qatar?

On the opening day of the World Cup, China accomplished a major feat in Qatar. We might even say that—even if the Chinese national football team had actually gone to Qatar—the significance of this event would still far outweigh that of the team’s participation. Of course, we all know the Chinese team definitely did not go to Qatar… So, what was this major event? It was the world’s largest LNG deal—unequivocally the biggest of its kind. According to media reports, on November 21, QatarEnergy and Sinopec signed a 27-year long-term liquefied natural gas (LNG) sales and purchase agreement, under which Qatar will supply China with 4 million tons of LNG annually. According to Reuters, this is the longest LNG agreement ever concluded in the history of LNG trading. Qatar is delighted. Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs and CEO of QatarEnergy, called it a “landmark agreement,” stating that it marks the arrival of long-term contracts—a development critically important to both buyer and seller. China is equally pleased. Ma Yongsheng, Chairman of Sinopec, noted that signing this agreement not only helps meet China’s domestic market demand for natural gas but also contributes to further optimizing China’s energy consumption structure. This is a normal commercial cooperation between enterprises—but we can also view this massive deal within the broader context of the global energy landscape. First, why Qatar? Because Qatar has gas—abundant gas. The North Field in the Persian Gulf is the world’s largest natural gas field, jointly owned by Qatar and Iran (which calls it the South Pars field). Nearly all of Qatar’s natural gas production—and about 60% of its exports—comes from this field. Qatar is already the world’s largest LNG exporter, and is currently expanding its LNG infrastructure. By 2027, Qatar’s LNG liquefaction capacity is expected to rise from 77 million tons per year to 126 million tons per year. Its key target customers are limited: Japan, the EU, China—and, in the future, India. Second, why China? Because China is still developing—and development requires natural gas. It must be recognized that as high-emission energy sources like coal are gradually phased out, natural gas will assume an increasingly vital role in countries’ energy mixes. To ensure energy security, China needs more pipeline-delivered natural gas—and also more LNG. China is already the world’s largest LNG importer. Last year, China imported a total of 81.4 million tons of LNG, of which nearly 9 million tons came from Qatar—accounting for 11% of China’s total LNG imports. In the first five months of this year, China’s LNG imports from Qatar rose from 11.7% year-on-year to 24.9%, making Qatar the second-largest LNG supplier to China—just behind Australia. Of course, Europe also needs LNG—especially this year. Due to the Russia-Ukraine conflict, Russian gas supplies to Europe have been cut off. Meanwhile, the U.S. has been selling LNG to Europe at prices three to four times higher; a single U.S. LNG tanker arriving in Europe can earn $100 million in profit—prompting French President Macron to publicly lament, “This is not what friendship truly means.” Third, why did Qatar and China reach this agreement? Several reasons explain this. First, the steadily deepening bilateral relationship between China and Qatar. While China may not beat Qatar on the football pitch, China holds unparalleled advantages across many other domains. During this Qatar World Cup, numerous stadiums—including the largest and most luxurious, Lusail Stadium—were constructed by Chinese enterprises.

Oil and gas facilities in Qatar, Saudi Arabia, the UAE, and other countries have recently come under attack. How serious is the current situation? How will this round of attacks affect global oil prices?

Italy—the second-largest European buyer of Qatari gas—imports approximately 7 billion cubic meters annually. Belgium—the natural gas hub of Northwestern Europe—imports roughly 5 billion cubic meters per year. How long can the gas inventories of these two countries last? According to data from European gas infrastructure, as of March 20, Italy’s gas storage level stood at about 48%, and Belgium’s at about 42%—both below their respective levels for the same period in previous years. Even more troubling is that Europe, having just climbed out of the pit of Russian gas cutoffs, has now fallen into another pit—Qatari supply disruptions. German Economy Minister Robert Habeck declared on March 20 that “energy supplies remain stable”—only for Qatar to announce force majeure the very next day. That slap to the face came faster than a missile. Now consider Asia. South Korea—the largest Asian buyer of Qatari gas—imports around 12 million tons annually. On March 21, Korea Gas Corporation held an emergency meeting to discuss response measures. But what are those measures? Buying from the U.S.? From Australia? From Russia? Each option carries significant costs. China’s situation is comparatively better. Qatari gas accounts for roughly 15% of China’s total gas imports—about 9 million tons annually. Yet China possesses multiple overland import routes, including the China-Russia Natural Gas Pipeline, the Central Asia Natural Gas Pipeline, and the China-Myanmar Oil & Gas Pipeline—making its import sources relatively diversified. A Chinese energy industry insider told the media that this “force majeure” declaration will have limited impact on China, “but it will cause massive shocks to spot market prices.” A line from the ancient Chinese historical text Records of the Grand Historian reads: “The bustling world throngs for profit; the restless world rushes for gain.” All this bustle and rush is ultimately for energy. Now that energy supplies are being choked off, bustle turns into anxiety—and rush becomes panic. Why five years? The most eye-catching figure is “five years.” Why not five months? Why not five weeks? Why five years? Because the issue lies with the Strait of Hormuz—and there is no foreseeable resolution within five years. According to QatarEnergy’s assessment report, even if the U.S.-Israel-Iran war were to end tomorrow, it would still take at least three to five years for security conditions in the Strait of Hormuz to return to normal. Iran will not easily relinquish this strategic trump card; the U.S. will not readily withdraw from these waters; and Gulf states will not easily find alternative shipping routes. What does “five years” mean? It means Europe must redraw its energy strategy; Asia must seek new suppliers; and the global LNG trade map must be redrawn. Qatar itself is redrawing its own map. In his statement, Al-Kaabi revealed that Qatar is accelerating the expansion of the North Field, scheduled for completion in 2027. Upon completion, Qatar’s annual LNG production capacity will increase from 77 million tons to 126 million tons. But here’s the problem: even if the gas field expands, the route remains blocked—so what good is increased capacity? A passage from the ancient Chinese treatise Discourses on Salt and Iron states: “The wise adapt to changing times; the knowledgeable adjust strategies according to circumstances.” What Qatar is doing now is precisely “adapting to changing times”—since the route remains blocked, it suspends supply; since a short-term solution is impossible, it plans for the long term. China’s countermeasures were laid out long ago. Although China was included on the list of affected countries, its response has been the calmest. Why? Because China’s energy strategy has been unfolding for two decades.

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