Qatar’s flagship North Field East (NFE) Project is expected to attract private sector investment given its “favourable economics and green credentials”, Arab Petroleum Investments Corporation (Apicorp) said on Tuesday.
The $28.75bn NFE Project features a state-of-art CCS facility to capture CO2 emissions from the project, Apicorp said in its 'Mena Energy Investment Outlook 2021-2025.'
The CCS facility will be the largest in the global LNG industry, and itself will run on renewable power through a 800MW solar plant, further reducing the project’s carbon footprint. Qatar Petroleum is also building a new super fleet of low-emissions LNG carriers, the report noted.
Qatar is also pledging green credentials in its LNG expansion by including state-of-the-art carbon/CO2 and GHG capture and separate production trains, which also boost the megaprojects economics as it markets industrial quantities of helium, sulphur and ammonia, Apicorp noted.
“Qatar’s NFE project remains the region’s single biggest ‘confirmed’ energy megaproject spend for 2021-25, and makes it the only country in the region whose 2021-25 committed spend tops its 2020 and 2019 outlooks”, Apicorp said.
Apicorp also noted the overall planned and committed energy investments in the Mena region will exceed $805bn over the next five years (2021-2025) – a $13bn increase from the $792bn estimate in last year’s five-year outlook.
The report attributes this modest rise to four factors: A strong confidence in the rebound of global GDP, rising energy demand, the comeback of Libyan projects – which alone accounts for around $10bn in planned projects – and the accelerated pace of renewables in the region.
Mena is estimated to add 3GW of installed solar power capacity in 2021 alone – double that of 2020 – and 20GW over the next five years.
The region’s economic forecasts suggest that commodity prices and exports will drive the rebound expected for most Mena countries in 2021. However, economies remain under fiscal strains due to unprecedented high debt levels and decline in oil prices, tourism revenues, and personal remittances.
Committed gas investments in Mena for the period 2021-2025 are expected to total $75bn to $9.5bn less than the previous outlook, Apicorp noted.
The decline is attributed to the completion of several megaprojects in 2020 and countries being more cautious to new project commitments in an era of gas overcapacity.
Qatar, Saudi Arabia, and Iraq are the top three Mena countries in terms of committed gas investments. This is owed to Qatar’s NFE Project, Saudi Arabia’s gas-to-power drive and the massive Jafurah unconventional gas development, which is poised to make the kingdom a global blue hydrogen exporter – and Iraq’s gas-to-power projects and determination to cut flaring and greenhouse gas emissions.
Planned investments meanwhile held relatively steady at $133bn for 2021-2025, signalling the region’s appetite for resuming its natural gas capacity build-up – particularly the ambitious unconventional gas developments in Saudi Arabia, UAE, Oman, and Algeria – once macro conditions improve.
Dr Ahmed Ali Attiga, chief executive officer, Apicorp said, “Apicorp’s Mena Energy Investment Outlook 2021-2025 indicates that energy industries are entering a period of relative stability in terms of investments as most Mena countries return to GDP growth in 2021 and the energy transition showing no signs of slowing down.
“We anticipate a slow but steady recovery of the energy sector from the fallout of the Covid-19 pandemic, supported by continued investment from the public sector and an upswing in demand.”