Qatar on Sunday named French company TotalEnergies as its first foreign partner to develop the world’s largest natural gas field and ultimately help ease Europe’s energy fears.
The French energy major will own a 6.25% share of the giant North Field East project which will help Qatar increase its production of liquefied natural gas (LNG) by more than 60% by 2027, the minister has said Qatari Energy, Saad Sherida al-Kaabi. conference.
Kaabi said it was “more of a marriage than an engagement” as the deal will last until 2054.
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Other foreign companies will also have stakes in a joint venture 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 participate in the giant $28 billion expansion, which Qatar had initially wanted to finance on its own.
“We have completed the selection process and have signed the agreements,” Kaabi said, adding that the names would be announced in the “near future”.
As European nations scramble to find alternatives to Russian oil and gas, North Field’s LNG is expected to begin commissioning in 2026.
TotalEnergies chief executive Patrick Pouyanne said the company’s biggest deal with Qatar would help offset the company’s withdrawal from Russia following the invasion of Ukraine.
Without giving numbers, Pouyanne said Qatar had demanded a high price in talks that began in 2019.
“You and your team have been a very good advocate for Qatar’s interests in this project,” he said in comments to the minister who is also the head of QE.
“Qatar Energy certainly had a tough deal. But for the world’s biggest LNG players like Shell and TotalEnergies, Qatar is too good to pass up. A stake in these LNG trains offers large-scale, low-cost supply. cost, great marketing opportunities and a good partner,” said Ben Cahill, an energy security specialist at the Center for Security and International Studies in Washington.
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Qatar is already one of the world’s leading producers of LNG, alongside the United States and Australia.
QE estimates that North Field holds about 10% of the world’s known natural gas reserves.
The reserves stretch under the sea into Iranian territory, where Tehran’s efforts to exploit its South Pars gas field have been hampered by international sanctions.
South Korea, Japan and China have become Qatar’s main LNG markets, but since an energy crisis hit Europe last year, the Gulf state has helped Britain with additional supplies and also announced a cooperation agreement with Germany.
Europe has long rejected the long-term deals that Qatar seeks for its energy, but the conflict in Ukraine has forced a change in attitude.
Qatar’s expansion “underscores its leadership position in this industry,” said Bill Farren-Price, head of macro oil and gas research at energy consultancy Enverus.
“With tight gas balance sheets globally amid reduced Russian gas exports to Europe, LNG is a key and growing part of the energy transition and Qatar is determined to leverage its reserves of world-class North Field to capture additional value through this deal.
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“Its partnership with TotalEnergies strengthens Doha’s political partnership with Western powers while giving it even more marketing options.”
The conflict in Ukraine has also injected new urgency into efforts around the world to develop new sources.
Tanzania on Saturday signed a framework agreement with British and Norwegian energy giants Shell and Equinor to implement a $30 billion project to export its natural gas.
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