Page 6 - MEOG Week 48

MEOG Commentary MEOG
Qatar delays NFE
award, expands
LNG production plan
Despite delays at its North Field Expansion project, Qatar has increased its LNG production outlook as a result of positive results from recent drilling and appraisal work at the field.
qatar
What:
Qatar now expects to produce 126mn tpy of LNG by 2027.
Why:
The country has raised its reserves estimate for the North Field.
What next:
Qatargas is reported
to have delayed the submission deadline for bids under the umbrella of the North Field Expansion.
REPORts emerged last week that Qatargas had delayed the submission date for bids for onshore work under the umbrella of its North Field Expansion (NFE) project, while bidding is set to begin for work at the Al-shaheen oilfield.
Project observers were quoted by Upstrea- monline as saying that bidding for two “sub- stantial onshore packages comprising the liquefaction and storage facilities” would now take place in Q1 2020 after missing the October deadline.
Meanwhile, another source said that this delay would push back the submission of bids for NFE’s key engineering, procurement and construction (EPC) deal until mid-2020.
In July, Us-based services firm McDermott was awarded a front-end engineering and design (FEED) contract as part of the major project.
the FEED contract covers wellhead plat- forms, pipelines and cables. In a press release, McDermott said that the scope of the work entailed the design of four offshore trunklines with intra-field pipelines, eight wellhead plat- forms and power and fibre-optic (PFO) subsea cable rings. The contract is thought to be worth up to $50mn.
the estimated Us$20bn expansion of the North Field has been the focus of external and internal attention on the Qatari energy sector since it was launched nearly two years ago.
The scheme was designed to raise upstream output by 1.4mn barrels of oil equivalent per day to 6.2mn boepd and expand LNG production by 31mn tonnes per year to 110mn tpy. However, this week QP said positive results from recent drilling and appraisal work had led it to raise its production expectations to 126mn tpy by 2027.
The main package, worth several billion dol- lars, covers four 7.8mn tpy LNG ‘mega-trains’ at the site where 14 trains of varying sizes currently produce just over 77mn tpy.
Japan’s Chiyoda was selected for the FEED contract in March 2018 and, in joint venture (JV) with technipFMC, is the strong favourite.
Chiyoda and technipFMC installed the six pre- vious mega-trains at the complex, completed last decade before the imposition of a 12-year devel- opment moratorium at the field.
The contracting process on the NFE is well underway, with a tender for the four new LNG trains issued in mid-April to three EPC JVs: Chiyoda and technipFMC; JGC and Hyun- dai Engineering & Construction; and saipem, McDermott and CtCI.
The remaining onshore packages cover two berths and infrastructure, chiefly pipelines, tying in the new components with existing facilities at the Ras Laffan complex.
QP CEO saad al-Kaabi has said on several occasions that all the EPC contracts on the scheme will be let by the end of 2019 under a schedule envisaging completion in 2023.
On April 22, QP turned to the transportation process, issuing a tender for potentially in excess of 100 LNG tankers.
expanding further
Despite the delays, Qatar boosted its production expectations to 126mn tpy by 2027 this week, representing an increase of about 64% from current levels. Al-Kaabi said on November 25 that confirmed gas reserves at the North Field were now above 1.76 quadrillion cubic feet (50tn cubic metres) and 70bn barrels of condensates.
“These results will ... enable us to immediately commence the necessary engineering work for two additional LNG mega-trains with a com- bined annual capacity of 16mn tpy,” al-Kaabi told a news conference in Doha.
The expansion plans come as a glut of new LNG supply on global markets is pushing prices for the fuel down to multi-year lows. However, Qatar benefits from some of the lowest gas pro- duction costs in the world, and hopes to tap its cheap, abundant gas resources in order to retain an advantage in an increasingly competitive market. Indeed, al-Kaabi has previously said he is not concerned about the price outlook for LNG
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w w w . N E W S B A S E . c o m Week 48 04•December•2019