DOHA: QatarEnergy on Sunday signed a partnership agreement with TotalEnergies for the North Field East extension of the world’s largest liquefied natural gas project.
Its managing director said other partners would be announced in the coming days.
The Gulf State is partnering with international energy companies in the first and largest phase of a nearly $30 billion expansion of the North Field project.
Saad Al-Kaabi, who is also Qatar’s minister of state for energy, said the partner selection process was finalized and subsequent signings could be announced as early as next week.
No company will have a higher stake than TotalEnergies, he added. TotalEnergies chief executive Patrick Pouyanne said the company will have 25% of a train – or liquefaction and purification facility – under the project.
North Field’s expansion plan includes six LNG trains that will increase Qatar’s liquefaction capacity from 77 million tonnes per year to 126 mtpa by 2027.
The oil majors have bid for four trains of the North Field East extension, with the other two trains forming part of a second phase, North Field South.
Al-Kaabi said Qatar has a unified approach, where the four trains are seen as one unit. TotalEnergies’ 25% stake in a virtual train gives it about 6.25% of all four trains.
“We had announced that we were no longer investing in any new projects in Russia, so signing this project in Qatar is important for us,” Pouyanne said.
Al-Kaabi said that once the investments are completed, Asian buyers are expected to make up half of the project’s market and European buyers the rest.
Exxon Mobil Corp., Shell, ConocoPhillips and Eni will also participate in the North Field expansion, sources said.
The project will strengthen Qatar’s position as the world’s top LNG exporter and help secure a long-term supply of gas to Europe as the continent seeks alternatives to Russian flows, people familiar with the matter said.
Major oil and gas producers are eager to secure a stake in the project, but Qatar’s strategy has been to raise the bar of what it expects from potential partners.
QatarEnergy waited nearly five years to sign partnership agreements and said it has abundant capital to self-finance the project.
Total, Exxon, Shell, Italy’s Eni and Chevron have offered Qatar Energy opportunities to invest in valuable assets they hold overseas.
The move helped QatarEnergy transform into a significant international player, with stakes in petrochemical facilities and oil blocks around the world, from South Africa to Suriname.