Sunday June 12, 2022
French giant TotalEnergies gains foothold in Qatar gas expansion
Saad Sherida al-Kaabi (right) and Patrick Pouyanne during the signing ceremony in Doha on Sunday. Agence France-Presse
Qatar on Sunday named France’s TotalEnergies as its first foreign partner to develop the world’s largest natural gas field and eventually help ease Europe’s energy fears.
The French energy major will have a 6.25-per cent share of the giant North Field East project that will help Qatar increase its liquefied natural gas (LNG) production by more than 60 per cent by 2027, Qatar’s Energy Minister Saad Sherida al-Kaabi told a news conference.
Kaabi said it was “a marriage more than an engagement” as the accord will last until 2054.
Other foreign firms will also have joint venture stakes with state-owned Qatar Energy (QE) but none will be bigger than TotalEnergies, said Kaabi, who did not reveal names.
Industry sources say ExxonMobil, Shell and ConocoPhillips are all in line to take part in the giant $28-billion expansion, that Qatar had originally wanted to finance alone.
“We have finished the selection process and we have signed the agreements,” Kaabi said, adding that names would be announced in the “near future”.
With European nations scrambling to find alternatives to Russian oil and gas, LNG from North Field is expected to start coming on line in 2026.
TotalEnergies chief executive Patrick Pouyanne said the company’s biggest deal with Qatar would help make up for the company’s withdrawal from Russia in the wake of the Ukraine invasion.
Without giving figures, Pouyanne indicated that Qatar had demanded a high price in the talks that started in 2019.
“Your team and yourself have been a very good defender of Qatar’s interests in this project,” he said in comments to the minister who is also the QE chief.
“Qatar Energy certainly drove a hard bargain. But for the biggest global LNG players like Shell and TotalEnergies, Qatar is too good to pass up. A stake in these LNG trains delivers scale, low-cost supply, great marketing opportunities, and a good partner,” said Ben Cahill, an energy security specialist at the centre for Security and International Studies in Washington.
Qatar is already one of the world’s top LNG producers, alongside the United States and Australia. QE estimates that North Field holds about 10 per cent of the world’s known natural gas reserves.
The reserves extend under the sea into Iranian territory, where Tehran’s efforts to exploit its South Pars gas field have been hindered by international sanctions.
South Korea, Japan and China have become the main markets for Qatar’s LNG but since an energy crisis hit Europe last year, the Gulf state has helped Britain with extra supplies and also announced a cooperation deal with Germany.