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Exclusive: Qatar Poised to Award Next LNG Prize

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By the end of this month, state-owned Qatar Energy will name its first partner for the next phase of its 48 million tons per year LNG mega-expansion, Qatar’s energy minister, Saad al-Kaabi, tells Energy Intelligence.

“At least one [company] is beyond the finish line,” said the minister in an exclusive interview in his office in Doha, while declining to reveal the winner.

Selection for equity and LNG offtake volumes in the prized 16 million tons/yr North Field South (NFS) project follows hot on the heels of partner selection for Phase-1 dubbed, North Field East (NFE). The awards came in quick succession of signing ceremonies over the summer.

That race saw Total Energies, Exxon Mobil, Shell, Eni and ConocoPhillips win stakes in the biggest project in the history of the LNG industry.

Energy Intelligence understands most — if not all — of those same companies are in the running for the Phase 2 awards.

Efforts to secure a partnership in the project had touched off an intense multi-year race among western energy firms to woo al-Kaabi, who had made it clear Qatar Energy was willing to take on the project by itself if he didn’t get the value he wanted.

Qatar Energy was also in discussions with large Asian LNG buyers for potential equity stakes in the expansion but to date, none have been named as partners for either phase of the project.

Even before the steady increase in LNG prices in 2021 and this year’s Ukraine-fueled bull market, the Qatar expansion was one of the most eagerly anticipated investment openings in years, boasting low-cost gas, lucrative associated liquids, massive economies of scale and low-carbon production.

Now, with Europe desperately trying to wean itself off Russian gas, Doha has become one of the most important sources of additional global supply.

In addition to its two North Field expansions — due in 2026 and then 2027 — Qatar Energy has a 70% stake in the 18 million tons/yr Golden Pass LNG project in the US, which will start up at the end of 2024.

The impact of the North Field expansion goes far beyond its gas volumes. There are also the associated liquids to be produced, including over 370,000 b/d of condensate alone.

The LNG projects will include greenhouse gas mitigation measures, including carbon, capture and sequestration and methane leak reduction technology costing more than $250 million.

Al-Kaabi has often cited the expansion’s low-carbon intensity per volume of output as a great selling point for carbon-conscious global buyers.

In the energy current crisis, however, buyers are understood to be increasingly fixated on securing supplies at the best price rather than environmental considerations.

Both NFE and NFS will be the first Qatari LNG projects to remove ethane from the gas stream. And this will provide feedstock for what will be the Middle East’s largest ethane cracker. The 2.08 million ton/yr facility will anchor Qatar Energy’s planned Ras Laffan Petrochemical Project (RLPP) joint venture with Chevron Phillips, due on stream in 2026.

For more on the North Field expansion, Qatar Energy’s international strategy, his views on the energy crisis and the future of gas, read the full interview with Qatar’s Minister of State for Energy Affairs, President and CEO of Qatar Energy Saad al-Kaabi next week in Petroleum Intelligence Weekly.

Al-Kaabi has been named the Energy Executive of the Year 2022 and will receive his award during the Energy Intelligence Forum held in London  on Oct.4-6.

Topics:
LNG Supply, Green LNG, Majors, NOCs
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