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Qatar Close to Finalizing LNG Expansion Lineup

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Qatar's negotiations with potential equity partners in the second phase of its LNG mega-expansion are almost concluded, the country's energy minister said Wednesday.

"We see about three [more] partners entering this project," Saad al-Kaabi told the Energy Intelligence Forum in London, referring to Phase 2 of Qatar's expansion, which is also known as North Field South (NFS).

These new investors will join French major TotalEnergies, which recently landed a 9.375% stake in NFS.

"We are done with almost everything. We are just defining the date of when my counterparts can come to Qatar to celebrate," he added.

'No Surprises'

Al-Kaabi also serves as CEO of QatarEnergy, which recently announced that Total had become the first equity partner in NFS.

The other partners in the 16 million ton per year NFS expansion will come from the pool of companies that were awarded stakes in Phase 1 of the LNG expansion, which is also known as North Field East (NFE)

There will be "no surprises" when the names are announced, al-Kaabi acknowledged.

In addition to Total, the Phase 1 equity stakeholders are Exxon Mobil (6.25%), Shell (6.25%), Eni (3.125%) and ConocoPhillips (3.125%).

In total, 25% of NFS is believed to be available for strategic equity partners.

Golden Pass

NFS — which is expected to start production in 2027 — is the final piece in a major LNG investment program that will raise QatarEnergy's gross liquefaction capacity to 142 million tons/yr.

It will follow the start-up of Phase 1/NFE in 2026, and the 18 million ton/yr Golden Pass LNG project in Texas.

The two Qatar LNG expansions "are the lowest carbon footprint projects anywhere in the world,” said al-Kaabi, the recipient of this year's Energy Executive of the Year Award.

The minister said that Golden Pass is expected to start operations in 2024, with commissioning of its final train in the third or fourth quarter of 2025.

QatarEnergy holds a 70% stake in Golden Pass, with Exxon holding the remaining 30%.

Top LNG Trader?

QatarEnergy's capacity push is accompanied by a parallel expansion in its shipping and trading operations.

QatarEnergy Trading was established in 2020 but is already turning over 5 million-10 million tons of LNG per year, including third-party gas, al-Kaabi said.

"We will be in the next five to 10 years the largest LNG trader in the world by far," he continued. "I would say the profitability of that venture is probably 20 times what I thought it could be."

Doha is also investing around $20 billion to add around 100 new LNG tankers to its fleet, with 65-70 already ordered.

'Gas Here to Stay'

The minister was bullish about the future of natural gas, saying that "in the end, gas is here to stay."

"It is a very much needed commodity. For the next 20-30 years, there is no way [demand] is going to peak," he added.

In the short term, Qatar has limited means to help Europe replace lost Russian gas volumes.

It expects to export around 15 million tons to Europe this year, with al-Kaabi expecting sales to Europe of 12 million-15 million tons next year.

Over the past six years, Qatar has leveraged investor interest in its LNG expansion to form international upstream partnerships with the companies that were shortlisted for the NFE project.

Al-Kaabi said Qatar is now targeting international upstream production of 500,000 barrels of oil equivalent per day by 2030.

Efforts have focused on the acquisition of large minority stakes in offshore exploration blocks.

And those investments have started to pay off, with discoveries in Cyprus, South Africa and most notably Namibia, where QatarEnergy has stakes in acreage operated by Total and Shell.

In Brazil, the company has teamed up with Petrobras and Total in the producing Sepia field, where output is expected to more than double in the next couple of years to 400,000 boe/d.

Topics:
Green LNG, LNG Projects, LNG Supply, ENERGY INTELLIGENCE FORUM 2022
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