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Qatar Petroleum on LNG push at home and abroad
QP is moving forward with plans to grow its domestic LNG production capacity, find new buyers and expand its overseas LNG presence.
QAtAr
WhAt:
QP is expanding its LNg operations at home and abroad.
Why:
Qatar wants to retain
a major share of the global LNg market amid intensifying competition.
WhAt next:
The company could soon announce a partner for its North field expansion, but may yet decide to go it alone.
QAtAR Petroleum (QP) is on a push to grow its LNG operations both at home and abroad.
The state-owned company wants to raise its LNG production capacity to 110mn tonnes per year (tpy) over the next five years from 77mn tpy currently. The plan involves building four new LNG mega-trains. At the same time, QP is expanding its LNG presence overseas with construction of the Golden Pass export termi- nal on the Us Gulf Coast in partnership with Exxonmobil.
the push comes as Qatar faces mounting competition from the Us and Australia, which have both experienced a major build-out of liquefaction capacity in recent years. Qatar was once the undisputed leader in global LNG exports, but now its export capacity is exceeded by that of Australia.
Indeed, Australia exported more LNG than Qatar in November 2018 and April 2019, accord- ing to the Us Energy Information Administra- tion (EIA).
The country’s exports are still rising as pro- duction ramps up at new facilities that have recently come online, and the EIA expects that Australia will consistently be exporting more than Qatar within the next year. But Australia is not likely to stay in the top spot for long, given the Us’ second wave of liquefaction capacity construction, now under way, and Qatar’s own LNG plans.
The EIA predicts the Us will have the world’s largest LNG export capacity by 2025, while the International Energy Agency (IEA) anticipates the country’s export capacity growing even faster, making it the largest exporter globally by 2024.
The final investment decision (FID) taken on Golden Pass LNG earlier this year suggests that QP wants to participate in the LNG boom over- seas as well as domestically.
domestic plans
Nonetheless, the company’s domestic plans are ambitious, with the 110mn tpy production target for 2024 representing a 43% increase in capacity. As part of this push, QP is expanding its North Field megaproject. Last week, the company announced that it had shortlisted a number of
international oil firms competing for a stake in the project. However, QP’s CEO, saad sherida al-Kaabi, who is also Qatar’s minister of state for Energy, told Reuters that the company might yet decide to go it alone unless a partnership offered it significant value.
Invitations to bid for a stake in the North Field expansion were sent out last month, and if QP does decide to bring a partner on board, the result will be declared in the first quarter of 2020.
“We like the partnership model for many benefits. But because we don’t need the partners, what’s going out is basically a set of criteria that we have, to demonstrate to us what added value we get for Qatar if you come in,” said al-Kaabi. “maybe they can give us something outside,” he added, suggesting the company could be keen to buy into other overseas LNG assets.
According to al-Kaabi, the remaining con- tracts for the expansion’s completion are set to be awarded by the end of 2019, while the majors on the shortlist are bidding for a stake in the com- pleted project.
QP has not disclosed the size of the stake on offer or which companies have been shortlisted. However, France’s total, Exxonmobil, Royal Dutch shell and Italy’s Eni are all reported to have offered QP stakes in assets abroad in a bid to secure an interest in the North Field.
seeking buyers
Finding buyers for the extra LNG it will bring onto the market is something international oil companies (IOCs) can help with, especially as existing contracts expire over the next five years. QP is expected to step up efforts to secure more long-term supply deals, in a move that is also being spurred by intensifying competition with Australia and the Us.
Earlier this month, QP signed up for the full capacity of the Zeebrugge LNG terminal in Bel- gium, under an agreement with Fluxys Belgium that will go into effect when current long-term unloading contracts expire and last until 2044.
The Zeebrugge LNG terminal has 380,000 cubic metres of storage capacity spread across four tanks, with throughput capacity of 9bn cubic metres. Construction of a fifth tank is under way, and will add a further 180,000 cubic
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w w w . N E W S B A S E . c o m Week 38 24•September•2019