LNG

QatarEnergy has signed up Italy’s Eni as a newcomer and the second overall equity partner for Qatar’s North Field East (NFE) expansion project for which French major TotalEnergies was the first signatory of a joint venture agreement.

QatarEnergy President and Chief Executive Saad Sherida Al-Kaabi and his Eni counterpart Claudio Descalzi signed the partnership agreement at a ceremony in Doha in Qatar.

The Qataris will hold a 75 percent interest while Eni will own the remaining 25 percent interest.

The Qatar-Eni venture will hold a 12.5 percent interest in the entire NFE project, including four mega-Trains, each with 8 million tonnes per annum of capacity.

The NFE project will expand Qatar’s LNG export capacity from the current 77 MTPA to 110 MTPA in what is a $28.75 billion investment.

QatarEnergy said the agreement with Eni marked the completion of a competitive process started in 2019 and has a duration of 27 years.

“We are honored and delighted for having been selected as partner in the North Field East expansion project,” said CEO Descalzi.

“As a newcomer joining this world-leading LNG project, we feel the privilege and the responsibility of being a strategic partner of choice for the State of Qatar,” declared Descalzi.

Gas security

“Eni looks forward to working with QatarEnergy on this project to positively contribute to increasing worldwide gas security of supply,” he stated.

TotalEnergies signed a similar deal on June 12 with QatarEnergy’s NFE expansion.

The NFE project using feed gas from Gulf waters was launched by QatarEnergy in mid-2019 and is currently under construction offshore.

A second phase of Qatar's LNG expansion is already on the drawing board and will further increase LNG production capacity from 110 MTPA to 126 MTPA.

The 33 MTPA Qatari first-phase expansion is just 5 MPTA short of the combined output of 38 MTPA of the two largest Asian LNG-producing nations of Malaysia and Indonesia.

The upstream part of the NFE project will develop the southeast area of the North Field resources and will comprise eight platforms, 80 wells and gas pipelines to the onshore liquefaction plant.

Other partners for the three other additional 8 MTPA Trains are expected to include companies with existing shares in Qatar’s LNG, US major ExxonMobil Corp, Shell and possibly ConocoPhillips.

TotalEnergies noted that it was present at the beginning of the LNG industry in Qatar some 30 years ago through its interest in Qatargas 1, and then Qatargas 2 in 2005.

The project partners noted that the NFE project was paying special attention to environmental and climate challenges.

“The native CO2 from natural gas production will be captured and sequestrated in a saline aquifer,” said a statement.

“In addition, the facilities will be connected to the country's electrical grid, which will supply a growing portion of renewable electricity, in line with Qatar’s climate ambitions, thanks to the giant Al Kharsaah solar power plant, which is scheduled to come on stream in 2022 and in which TotalEnergies is also a partner,” it added.

QatarEnergy said that as part of its LNG expansion project it awarded the engineering, procurement, construction and installation (EPCI) contract for the offshore portion of its North Field feed-gas project to Houston, Texas-based firm McDermott Inc.

The expansion project will increase the state of Qatar’s LNG production capacity from 77 million tonnes per annum to 126 MTPA, through the North Field East (NFE) and North Field South (NFS) development ventures with first LNG expected in 2025.

QatarEnergy explained that the scope for the contract includes 13 normally unmanned wellhead platforms topsides (eight for NFE and five for NFS), in addition to various connecting pipelines and the shore approaches for the NFE pipelines, beach valve stations and buildings.

The Qataris added that the jackets and the pipelines for the NFS Project will be subject to a separate tender which is expected to be awarded in the first half of 2022.

“The award of this major EPCI contract is a momentous milestone that demonstrates QatarEnergy’s commitment to delivering our LNG expansion projects on time and to ensure the significant additional global LNG demand is catered for in a timely manner,” said Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs and the President and chief Executive of QatarEnergy.

“This contract also reinforces our excellent relationship with McDermott,” added Al-Kaabi.

“We are confident that the effective collaboration between QatarEnergy, Qatargas and McDermott will result in the safe and successful delivery of the project according to plan,” stated the CEO.

Al-Kaabi added that the QatarEnergy affiliate Qatargas, which has a proven history of delivering such major projects, has been entrusted with executing this mega project on behalf of QatarEnergy.​

“I would like to take this opportunity to express my thanks and appreciation to Sheikh Khalid bin Khalifa Al-Thani, the CEO of Qatargas, and to both the Qatargas and QatarEnergy teams for their significant efforts and contributions that resulted in the successful and timely execution of this contract,” Al-Kaabi declared.

The scope of the first phase of the expansion at the Ras Laffan production complex involves an additional four Trains, each with 8.0 MTPA of output.

Qatar has the southern portion of the North Field in Gulf waters and the other part is under the jurisdiction of neighbouring Iran.

Qatar Petroleum President and Chief Executive Saad bin Sherida Al-Kaabi said that Qatar had delayed commercial bidding deadlines for its LNG expansion plans but contracts would still be awarded in 2020 as he saw the market rebounding and the Gulf nation's own shipments would keep flowing.

Qatar Petroleum said its decision to self-finance the North Field natural gas and Ras Laffan LNG expansion, to tender for contractors and drill appraisal wells before offering partnerships was part of its strategy to show the value of its assets.