In a move to expand the world’s largest liquefied natural gas (LNG) project, QatarEnergy has entered into a partnership agreement with TotalEnergies last Sunday. The CEO of QatarEnergy announced that more partners will be added in the near future.
In line with an almost USD30 billion expansion of the North Field Project, Qatar is set to partner with international energy companies in its first and largest expansion phase.
Qatar’s Minister of State for Energy, Saad al-Kaabi, stated that the selection process for potential partners had been finalised, and subsequent partnerships will be announced as early as next week.
The minister added that no company will have a stake higher than that of TotalEnergies.
CEO of TotalEnergies, Patrick Pouyanne, announced that the company will own 25 percent of one train (liquefaction and purification facility) in the project.
The expansion plan for the North Field Project includes six LNG trains which are scheduled to increase the state’s liquefaction capacity from 77 million tonnes per annum (mtpa), to 126 mtpa by the year 2027.
Major oil companies from around the world have been bidding for four trains in the North Field East expansion, and the other two trains part of a second phase – North Field South.
Kaabi stated that Qatar was adopting a unified approach, with all four trains being considered as one unit. The 25 percent stake of TotalEnergies in one train, would translate into a 6.25 percent ownership of the entire four trains.
Pouyanne stated that since the company would no longer invest in any new project in Russia, the announcement for the project in Qatar assumed increased importance for the company.
Kaabi also announced that once all the investment is complete, half the market is expected to comprise Asian buyers, with the other half being from Europe.
Sources added that multinational companies like Exxon Mobil Corp, ConocoPhillips, Eni and Shell are also expected to participate in the North Field expansion plans.
Qatar positioned as the world’s largest exporter of LNG
The North Field project will enhance Qatar’s position as the world’s largest LNG exporter and would guarantee a long-term supply of gas to Europe, which is already seeking an alternative to Russian supplies.
The top oil and gas producers have been eager to secure a stake in the project, but Qatar’s strategy has been to raise the bar on what it expects from potential partners.
QatarEnrgy, while emphasizing that it had adequate capital to self-fund the project, also said that it had waited for five years to sign partnership agreements with the oil companies.
Total, Exxon, Shell, Italy’s Eni and Chevron have offered Qatar Energy opportunities to invest in prize assets they hold overseas, in return for an opportunity for them to invest in the North Field project.
This strategic arrangement has helped Qatar evolve into a significant international player with ownership stakes in petro projects and oil blocks around the world.