QP signs deal for $28.75bn mega LNG expansion at North Field
February 08 2021 09:19 PM
HE the Minister of State for Energy Affairs Saad Sherida al-Kaabi and other officials at the signing
HE the Minister of State for Energy Affairs Saad Sherida al-Kaabi and other officials at the signing ceremony

*World’s largest LNG project will raise Qatar’s production capacity from 77mn tons per year (mmtpy) to 110 mmtpy by 2025

 

Qatar Petroleum (QP) has taken the final investment decision for developing the $28.75bn North Field East Project (NFE), the world’s largest LNG project, which will raise Qatar’s LNG production capacity from 77mn tons per year (mmtpy) to 110 mmtpy by 2025.

In addition to LNG, the project will produce condensate, LPG, ethane, sulfur and helium.

It is expected to start production in the fourth quarter of 2025 and its total production will reach about 1.4mn barrels oil equivalent per day.

The decision to proceed with the investment was announced during a signing ceremony held on Monday to celebrate the execution of the project’s key onshore engineering, procurement and construction (EPC) contract.

The contract was signed by HE the Minister of State for Energy Affairs Saad Sherida al-Kaabi, also the President and CEO of QP, Kazushi Okawa, chairman of the Board and CEO of Chiyoda Corp, and Arnaud Pieton, president, Technip Energies, in the attendance of senior executives from Qatar Petroleum, Qatargas, Chiyoda, and Technip.

The main scope of the EPC contract is the construction of four mega LNG trains with a capacity of eight mmtpy each, with associated facilities for gas treatment, natural gas liquids recovery, as well as helium extraction and refining within Ras Laffan Industrial City.

At the signing ceremony, al-Kaabi thanked executives in attendance from Chiyoda and Technip, and said, “The execution of this EPC contract marks the commencement of the construction of the North Field East LNG Project, and is a significant landmark in Qatar Petroleum's strategic growth journey in a sustainable manner.

The total cost of the NFE project will be $28.75bn, making it one of the energy industry’s largest investments in the past few years, in addition to being the largest LNG capacity addition ever, and the most competitive LNG project in the world.

“This project will generate substantial revenues for the state of Qatar and will have significant benefits to all sectors of the Qatari economy during the construction phase and beyond.”

Highlighting the “significance” of this event in the context of the global LNG and energy industry, al-Kaabi said, “This event is of particular importance as it comes at a critical time when the world is still reeling from the effects of a global pandemic and related depressed economies.

"This investment decision is a clear demonstration of the steadfast commitment by the State of Qatar to supply the world with the clean energy it needs.

“Today’s decision carries even more significance considering that it encompasses a number of concrete environmental investments in support of our strong commitment to achieve the highest environmental standards and to provide a credible solution in the low-carbon energy transition.

“One of the most important environmental elements of the NFE project is its CO2 capture and sequestration (CCS) system that will be integrated with our wider CCS scheme in Ras Laffan, which once fully operational will be the largest of its kind in terms of capacity in the LNG industry, and will be one of the largest ever developed anywhere in the world.” al-Kaabi added.

In addition to the CCS scheme, the NFE project will have a number of elements that provide this project with a unique positive environmental proposition.

The NFE project represents the first phase of LNG expansion in Qatar, while the second phase, referred to as the North Field South Project (NFS), will further increase Qatar’s LNG production capacity from 110mn tonnes per year to 126 mmtpy.

With an expected production start date in 2027, the NFS project involves the construction of two additional mega LNG trains (with a capacity of eight mmtpy each) and associated offshore and onshore facilities.

The NFS project was initiated as a result of QP’s successful onshore appraisal activities in the North Field and targets the monetization of gas from the southern sector of the North Field.

As these appraisal activities continue, QP is evaluating further LNG capacity expansions beyond 126 mmtpy.

Al-Kaabi concluded his remarks by saying: “I would like to express our sincere gratitude to His Highness Sheikh Tamim bin Hamad al-Thani, the Amir of the State of Qatar, for his guidance and unwavering support to Qatar Petroleum and Qatar’s energy sector.”

 

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Bidding process for IOC partners to start next week

 

Qatar Petroleum (QP) is evaluating further increase in LNG capacity beyond 126 mmtpy, said HE the Minister of State for Energy Affairs Saad Sherida al-Kaabi.

"I would say, stay tuned," al-Kaabi told a virtual media briefing on Monday.

Although QP is ready to develop the North Field alone, al-Kaabi said the bidding process for international oil firms (IOCs) to take up to a 30% stake in the project's first phase will start next week.

He said he expects a decision to finalise partnerships with the IOCs for the field's expansion by the end of this year.

ExxonMobil, Royal Dutch Shell, Total and ConocoPhillips are long-standing partners in Qatar's LNG industry.

Last updated: February 08 2021 09:57 PM


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