LNG

QatarEnergy, the leading global LNG producer and with three growth projects being developed has signed time-charter party (TCP) agreements with Qatar Gas Transport Co. (Nakilat) for the operation of 25 conventional-size LNG vessels as part of the second shipowner tender under Qatar’s LNG fleet expansion programme.

The agreements were signed in Doha by Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs and President and Chief Executive of QatarEnergy and Abdullah Al-Sulaiti, the CEO of Nakilat.

A statement said that 17 of the 25 LNG vessels are being constructed at the Hyundai Heavy Industries (HHI) shipyard in South Korea, while the remaining eight are being constructed at Hanwha Ocean, formerly Daewoo Shipbuilding and Marine Engineering, also in South Korea.

“These agreements firm up last month’s selection of Nakilat as the owner and operator of up to 25 conventional-size LNG carriers, underscoring our continued confidence in Qatar’s flagship LNG shipping and maritime company,” said Al-Kaabi.

“This is a testament to Nakilat’s world-class capabilities as well as to the significant contributions of Qatari listed companies to our country’s national economy,” he explained.

“The agreements we signed today play an important role in implementing QatarEnergy’s historic LNG shipping programme, which will cater for our future requirements, as we move forward with the expansion of our LNG production capacity to 142 million tonnes per annum by 2030,” Al-Kaabi stated.

Each of the 25 vessels will have a capacity of 174,000 cubic metres and will be chartered out by Nakilat to affiliates of QatarEnergy pursuant to the 15-year TCP agreements.

Liquefaction surge

Qatar announced at the end of February 2024 that it was going ahead with a third huge expansion called the North Field West (NFW) project to take overall output to 142 MTPA by the end of the decade.

The NFW joint venture will add to production expansions already under way with the North Field East (NFE) and North Field South (NFS) LNG projects.

The current NFE ramp-up of QatarEnergy’s liquefaction capacity will take production from 77 MTPA to 110 MTPA by 2027.

The second phase, called the NFS venture, will further increase the LNG output capacity from 110 MTPA to 126 MTPA.

The new NFW project will be developed to take production to 142 MTPA.

Overall the three expansions will put into production a total of eight LNG mega-Trains, each with nameplate capacity of around 8 MTPA and total additional nameplate capacity of just over 64 MTPA.

French major TotalEnergies is the first oil and gas major to be selected as a partner and shareholder in the Qatar North Field East liquified natural gas expansion project in the Arabian Gulf.

Qatar Petroleum has signed a 10-year Sale and Purchase Agreement with Royal Dutch Shell for the supply of 1 million tonnes per annum of liquefied natural gas to China.

The shipments will commence in January 2022 to various Chinese regasification terminals.

“We are pleased to enter into this new LNG SPA with our trusted partner Shell,” said Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs and the President and Chief Executive of Qatar Petroleum.

“I am especially delighted that this agreement will meet part of the demand of Shell's end customers in China, thereby further supplementing Qatar's contribution to meeting China's growing energy needs,” added Al-Kaabi.

The Qataris believe that the SPA with Shell to supply China further highlighted their ability to meet the requirements of customers and partners across the world.

“I would like to take this opportunity to thank the management and staff of Shell for the successful conclusion of this SPA, which is another testament to our long and fruitful partnership,” stated Al-Kaabi.

The Qatari Minister also thanked Sheikh Khalid Khalifa Al Thani, the CEO of Qatargas, and his team for their valuable contributions to reinforce Qatar's position in the LNG market.

Qatar plans to supply the LNG volumes contracted under this agreement from its Qatargas I venture, which will become 100 percent owned by Qatar Petroleum as of January 2022.

The Qatargas I joint venture, also comprising ExxonMobil, France’s TotalEnergies and Japanese firms Marubeni Corp. Mitsui & Co. will have been on stream for 25 years in 2022.

“China is considered a major customer for the State of Qatar and a strategic partner in the energy sector,” said the statement.

“With the conclusion of this agreement, China will be supplied with approximately 12 MPTA of LNG under long-term SPAs from Qatar,” it added.

Qatar Petroleum is in the midst preparations for LNG expansion and its various projects, including the North Field South venture, will cost around $35 billion spread over the next five years, though the Qataris will have several equity partners from the energy majors and whose names have yet to be disclosed.

The expansion of output at the Ras Laffan LNG plant 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 with a future second expansion already announced.