State-owned QatarEnergy has enlisted a growing number of global supermajors in a relatively short period for the development of the world’s largest LNG project set to boost Qatar’s position as the world’s top LNG exporter.
European companies Eni SpA and TotalEnergies SE plus U.S.-based ConocoPhillips Co. and Exxon Mobil Corp. have all agreed, within the span of roughly two weeks, to participate in the four train North Field East (NFE) expansion project, which when completed will increase Qatar’s LNG production by 32 million tonnes per annum (mtpa) in 2026.
The expansion project comes as global energy markets are struggling to boost supply impacted by Russia’s invasion in the Ukraine. The initial project and others in the Middle Eastern country offer significant opportunities for U.S. companies looking to offer products and services related to the LNG production process, according to the Washington-based International Trade Administration (ITA).
UPDATE:
QatarEnergy Selects Shell as Final Partner in Mega LNG Project
NFE, the single largest project in the history of the LNG industry, will boost Qatar’s LNG production capacity to 110 mtpa in 2026 from 77 mtpa currently. This expansion, when coupled with the two train 16 mtpa North Field South (NFS) expansion project, will further boost Qatar’s total LNG production to 126 mtpa, ranking the country as the largest single LNG producer in the world, according to details revealed this month by QatarEnergy.
NFE will provide much-needed low-carbon energy supply to the world market. The project will command an estimated investment of $28.8 billion and will employ high health, safety and environmental standards including carbon capture and sequestration to reduce the project’s overall carbon footprint to the lowest levels possible, the Qatari company said.
Qatar’s exports of LNG, crude oil and petroleum products make up the bulk of the government revenue while earnings from the hydrocarbons sector account for more than 50% of the country’s total government revenues, the ITA said.
International Partners
Opportunities to invest in Qatar’s LNG sector commenced in May 2021 with the lifting of a self-imposed 12-year moratorium on further developments related to LNG extraction from the country’s North Field.
So far, QatarEnergy has seemingly jettisoned development efforts with the signing in June of four deals in Doha with joint venture (JV) partners from the U.S., Italy and France. Collectively, the JVs hold a 75% interest in NFE and additional partner signings could follow.
On June 21, a partner agreement was signed by QatarEnergy (75% working interest) and Irving, Texas-based Exxon Mobil (25% working interest) to form a new JV that will hold a 25% interest in the entire NFE project.
“We are collaborating with QatarEnergy on North Field East to accelerate the production of secure, affordable and cleaner energy our world needs.”—Darren Woods, chairman and CEO, Exxon Mobil
On June 20, a partner agreement was signed by QatarEnergy (75% working interest) and Houston-based ConocoPhillips (25% working interest) to form a new JV that will hold a 12.5% interest in the NFE project.
“Our collaboration will help produce cleaner energy to meet growing global demand and achieve a realistic energy transition towards achieving our climate change objectives thanks to the project’s industry-leading environmental attributes, including carbon capture and sequestration and other technologies deployed in this project.”—Qatar Energy Minister Saad Sherida Al-Kaabi
On June 19, a partner agreement was signed by QatarEnergy (75% working interest) and Rome-based Eni (25% working interest) to form a new JV that will hold a 12.5% interest in the NFE project. The agreement marks Eni’s initial entry into Qatar’s upstream sector.
“This agreement is a significant milestone for Eni and fits our objective to diversify into cleaner and more reliable energy sources in line with our decarbonization strategy.”—Claudio Descalzi, CEO, Eni
On June 12, a partner agreement was signed by QatarEnergy (75% working interest) and Paris-based TotalEnergies (25% working interest) to form a new JV that will hold a 25% interest in the NFE project. The agreement represented the first international company selected to partner in the project.
“It is good news for the fight against climate change as gas and LNG are key to support the energy transition, and notably the shift from coal to gas in many countries. With its low costs and low greenhouse gas emissions—thanks to carbon capture and storage—the North Field expansion will be an exemplary and major contribution to our low-carbon LNG growth strategy.”—Patrick Pouyanné, Chairman and CEO, TotalEnergies
These deals were preceded by the award of the engineering, procurement and construction (EPC) contract for NFE, which was signed on April 28. A JV between Técnicas Reunidas SA and Wison Engineering was selected as the EPC contractor and awarded a lump-sum contract to expand sulfur handling, storage, and loading facilities within Ras Laffan Industrial City. The contract also includes an option related to further expansion to support sulfur production for the two additional LNG trains of the NFS project, and infrastructure to support future additional LNG trains, QatarEnergy said.
North Gas Field
Qatar’s North Gas Field was discovered in 1971 and is considered the largest single non-associated gas reservoir in the world. The North Gas Field lies off the northeast shore of the Qatar peninsula and spans 6,000 sq km, equivalent to about half the land area of Qatar. The field has total recoverable gas of more than 900 Tcf, equivalent to approximately 10% of the world's known reserves.
Gas from the North Gas Field will be used to supply large-scale renewable gas sales contracts for decades to come and will be a significant contributor to Qatar’s future economic growth. Gas produced from the field will be processed to produce LNG, gas-to-liquids, NGL and other gas-related industries, in addition to pipeline gas for export.
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