Page 4 - GLNG Week 19 2021

GLNG COMMENTARY GLNG

Qatar reportedly pivots to China

in search for LNG partners

Qatar Petroleum is reported to be in talks with Chinese firms with a view to

bringing them in as partners in its LNG expansion

POLICY QATAR appears to be shifting its attention to full ownership of the facility. QP holds a 65%
China as it seeks partners for its giant North stake in the facility, with Total and ExxonMobil
WHAT: Field expansion project, which is the world’s sin- owning 10% stakes each, while Japanese firms
QP is reportedly in talks gle largest LNG project. Marubeni and Mitsui & Co. each hold 7.5%
with state-owned Chinese Reuters reported this week, citing three interests.
firms over equity stakes sources familiar with the matter, that state- Reuters cited anonymous sources from Total
in its giant North Field owned Qatar Petroleum (QP) was in talks with and ExxonMobil as saying their companies had
expansion project. Chinese state firms including PetroChina and expected to negotiate an extension.
Sinopec, on equity stakes in the $28.7bn North
WHY: Field expansion. It was unclear how advanced Looking east
Trends in global demand these talks were. According to one source, Pet- There are a number of trends currently playing
patterns, as well as roChina was in discussions over a 5% stake. out that could be causing Qatar to pivot to China.
Qatar’s own position, are This comes after CNOOC Ltd’s chief finan- Demand patterns are likely to be foremost
prompting a shift away cial officer, Xie Weizhi, said last month that the among these, with China on course to become
from Western partners. company was “very interested” in Qatar’s gas the world’s largest LNG importer by next year,
projects. overtaking Japan.
WHAT NEXT: QP had previously shortlisted several inter- Meanwhile, the West has tapped into its own
The pivot could be timely national oil companies (IOCs) as potential abundant gas supplies through the shale revo-
for China, which is in the partners in the North Field expansion, and lution in the US, which has led to several LNG
midst of an escalating said it would finalise the details in 2020, but the import terminals on the country’s coast being
dispute with Australia. process has been delayed. More recently, the converted to liquefaction and exports. Addi-
company said it would have partnerships in the tionally, the energy transition threatens to make
expansion finalised by the end of 2021. gas fall out of favour more quickly in regions
ExxonMobil, Royal Dutch Shell and Total such as Europe, while in China and other Asian
are already among the long-standing partners countries there is extensive potential to replace
in Qatar’s LNG operations and were previously coal with gas.
thought to be likely contenders to become part- Another significant development is the fact
ners in the expansion. However, in another that while Qatar relied on IOCs for expertise
potential sign of shifts in its partnerships, QP and investment in its initial LNG projects, it
announced in March that it would not renew no longer needs them to move forward with its
a contract with partners in its Qatargas 1 LNG expansion plans.
plant after it expires next year, instead taking Indeed, one of Reuters’ sources said that

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