Qatar signs contracts for unique $29Bln LNG expansion backed by carbon-capture and solar power

Tuesday, 09 February 2021
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Qatar Petroleum has taken the final investment decision and signed project engineering contracts with Japanese company Chiyoda Corp. and European-based Technip Energies for a major liquefied natural gas expansion backed by add-ons such as carbon-capture and solar power.

The expansion will comprise the construction of four Trains for liquefaction to take the Arab Gulf state’s output from 77 million tonnes per annum up to 110 MTPA.

Qatar is additionally considering boosting capacity beyond the 126 MTPA future second expansion already announced.

The contract covering onshore engineering, procurement and construction was signed with the Chiyoda-Technip joint venture and is known as the North Field East project.

The main scope of the EPC contract is the construction of the four Trains, each with a capacity of up to 8.25 MTPA with associated facilities for gas treatment, natural gas liquids recovery, as well as helium extraction and refining within the Ras Laffan complex.

“Production from that phase will start by the fourth quarter of 2025 and reach full capacity by late 2026 or early 2027,” said Saad Sherida Al-Kaabi, Qatar Petroleum Chief Executive as well as Qatar's Minister of State for Energy.

“The total cost of the project will be $28.7 billion, making it one of the industry’s largest investments in the past few years and the largest LNG capacity ever built,” added Al-Kaabi.

Al-Kaabi explained that although Qatar Petroleum was ready to develop the additional North Field resources for the overall project on its own, a bidding process for international oil and gas companies to take up to a 30 percent stake in the first phase was being launched.

Al-Kaabi said he expected a decision on finalizing any partnerships for the expansion with oil and gas majors to be announced by the end of 2021.

Current partners of Qatar in the existing Trains at Ras Laffan include ExxonMobil, ConocoPhillips, Royal Dutch Shell and France’s Total.

A second expansion phase, known as the North Field South project, would lift Qatar’s LNG production capacity to 126 MTPA by 2027 from the current 77 MTPA.

Al-Kaabi said that the Qataris were also evaluating possible further increase in LNG capacity beyond the 126 MTPA.

The decision to proceed with the investment was announced during a Webcast signing ceremony to celebrate the execution of the EPC contract.

The contract was signed by Al-Kaabi, along with the Chairman and CEO of Chiyoda, Kazushi Okawa, and Arnaud Pieton, the President of Technip Energies.

“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,” added Al-Kaabi.

The Qatari CEO said the EPC signing had particular importance as it came 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,” he added.

Al-Kaabi noted that the expansion would include its own carbon-dioxide capture and sequestration (CCS) system that would be integrated with a wider CCS project in Ras Laffan, which would be the largest of its kind in terms of capacity in the LNG industry.

A significant portion of the expansion project's electrical power needs would be provided from Qatar's national power grid, and Qatar Petroleum is in the process of procuring such power from the 800 megawatt solar power plant currently under construction in Al-Kharsaah.

This is in addition to a further 800 MW of solar power which Qatar Petroleum will construct in the near future as part of its plans to have a solar power portfolio of more than 4,000 MW by 2030.

The North Field East project would also include a jetty boil-off gas recovery system, which will help reduce GHG by a further 1 MTPA of CO2 equivalent.

Al-Kaabi concluded his remarks by thanking the Emir of Qatar for his continued support of the nation’s growing LNG industry.

“I would like to express our sincere gratitude to His Highness Sheikh Tamim Bin Hamad Al-Thani, the Emir of the State of Qatar, for his guidance and unwavering support to Qatar Petroleum and Qatar's energy sector,” stated Al-Kaabi.

Japanese company Chiyoda said it was delighted with the signing of the Qatar contract and pointed out that it had been engaged in various hydrocarbon and other industrial plant projects in Qatar since the 1970.

“Chiyoda has been involved in all LNG Trains including NFE Trains as FEED contractor and built 12 out of 14 of the existing LNG Trains in Qatar,” added the Yokohama-based company.

“Chiyoda has provided and completed more than 100 projects for various clients in Qatar, with Chiyoda’s local group company, Chiyoda Almana Engineering,” it stated.

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