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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

COMMENTARY QATAR appears to be shifting its attention to a contract with partners in its Qatargas 1 LNG
China as it seeks partners for its giant North plant after it expires next year, instead taking full
Field expansion project, which is the world’s sin- ownership of the facility. QP holds a 65% stake in
WHAT: gle largest LNG project. the facility, with Total and ExxonMobil owning
QP is reportedly in talks Reuters reported this week, citing three 10% stakes each, while Japanese firms Marubeni
with state-owned Chinese sources familiar with the matter, that state- and Mitsui & Co. each hold 7.5% interests.
firms over equity stakes owned Qatar Petroleum (QP) was in talks with Reuters cited anonymous sources from Total
in its giant North Field Chinese state firms including PetroChina and and ExxonMobil as saying their companies had
expansion project. Sinopec, on equity stakes in the $28.7bn North expected to negotiate an extension.
Field expansion. It was unclear how advanced
WHY: these talks were. According to one source, Pet- Looking east
Trends in global demand roChina was in discussions over a 5% stake. There are a number of trends currently playing
patterns, as well as This comes after CNOOC Ltd’s chief finan- out that could be causing Qatar to pivot to China.
Qatar’s own position, are cial officer, Xie Weizhi, said last month that the Demand patterns are likely to be foremost
prompting a shift away company was “very interested” in Qatar’s gas among these, with China on course to become
from Western partners. projects. the world’s largest LNG importer by next year,
QP had previously shortlisted several inter- overtaking Japan.
WHAT NEXT: national oil companies (IOCs) as potential part- Meanwhile, the West has tapped into its own
The pivot could be timely ners in the North Field expansion, and said it abundant gas supplies through the shale revo-
for China, which is in the would finalise the details in 2020, but the process lution in the US, which has led to several LNG
midst of an escalating has been delayed. More recently, the company import terminals on the country’s coast being
dispute with Australia. said it would have partnerships in the expansion converted to liquefaction and exports. Addition-
finalised by the end of 2021. ally, the energy transition threatens to make gas
ExxonMobil, Royal Dutch Shell and Total fall out of favour more quickly in regions such as
are already among the long-standing partners Europe, while in China and other Asian coun-
in Qatar’s LNG operations and were previously tries there is extensive potential to replace coal
thought to be likely contenders to become part- with gas.
ners in the expansion. However, in another Another significant development is the fact
potential sign of shifts in its partnerships, QP that while Qatar relied on IOCs for expertise
announced in March that it would not renew and investment in its initial LNG projects, it

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