China yesterday signed two multibillion-dollar long-term deals to buy liquefied natural gas from Qatar, marking a milestone in Asia's evolution as the hottest market for the fuel. PetroChina struck a deal to buy 3m tonnes of LNG a year over 25 years from 2011 with Qatar and its partner, Royal Dutch Shell. Analysts said the deal could could be worth as much as $60bn. CNOOC, China's primary LNG importer, also signed a framework supply agreement. Al-though it is yet to be formalised in a binding contract, it is for 2m tonnes a year from 2009. The deals have already been seen as a sign that Beijing recognises it must pay global market prices to secure supplies of LNG. It has already intensified the demand pressures in the tight global LNG market and is expected to force other countries to pay higher prices. "Three to four years ago, the Qatari projects were going to send this gas to the Atlantic Basin, particularly the US," said Frank Harris, of Wood Mackenzie, the Edinburgh consulting firm. "What it means is that we are going to see a lot less LNG go to the US than we thought." Though terms were not disclosed and the ultimate price paid will depend on the oil price, Wood Mackenzie valued the deal at $60bn, assuming a $100 a barrel crude price. The natural gas market has tightened amid booming demand in Asia and a sharp decline in supplies from Indonesia, which has so little gas left to export that it renewed deals for less than one quarter of the original gas volume. Japan, South Korea and several other Asian nations have all been scrambling to secure gas. In Japan, recent nuclear outages have pushed the leading utility to double the amount of LNG it purchased in the past 12 months. Japanese companies recently paid a record price for a supply deal with Indonesia in anticipation of today's deals. China has been reluctant to return to the global LNG markets since signing its first long-term supply agreement with an Australian supplier in 2002, which locked in a low price over the term of the 25-year contact. Higher prices and a tighter market have pushed the country's companies back into the fray. www.ft.com/energy Copyright The Financial Times Limited 2008