Page 7 - MEOG Week 24 2021

MEOG COMMENTARY MEOG

Map of Qatar’s main oil
and gas fields.

Source: QP

thought to be the main driver behind Doha’s The decision was seen as another signal of
attempt to bring in other participants now. Qatar’s growing confidence in its abilities to
“I don’t think QP needs the IOCs expertise develop and operate liquefaction capacity. It also
in the upstream or midstream construction of came as a surprise to QP’s international partners,
the project but they will be glad to see someone which had been hoping for a renewal or exten-
take some LNG volumes off their hands,” a sen- sion of existing contracts. It seems, however, that
ior source at one of the bidding companies told IOCs will still be able to participate in Qatar’s
Reuters. LNG industry.
The interest in participating in North Field
East comes despite relatively low returns from Gallaf bids
the project, the news service noted. Sources from Meanwhile, Qatar’s North Oil Co. (NOC) joint
three of the companies involved in the process venture between QP and TotalEnergies is set
told Reuters that QP had offered international to announce the winners of work on the third
bidders returns of around 8-10% on their invest- phase of its billion-dollar Gallaf project to main-
ment, down from around 15-20% returns for tain oil production from Qatar’s largest oilfield,
participants in Qatar’s early LNG facilities. the offshore Al-Shaheen asset.
The results of the bidding process are not Speaking to Upstream this week, several
expected to be announced before September, sources said that letters of intent (LoIs) have been
according to two of the sources. signed with engineering, procurement and con-
It is worth noting that reports emerged struction (EPC) contractors from South Korea,
around a month ago that QP was also in talks Vietnam, Norway and Italy for work on wellhead
with state-owned Chinese companies including platforms, a new processing platform and subsea
PetroChina and Sinopec over equity stakes in flowlines.
the NFE project. This comes as China remains One of the sources said that Gallaf phase
on course to become the world’s largest LNG three includes a 30,000-tonne processing plat-
importer, but has seen trade relations worsen form including a deck weighing around 20,000
with Australia – a major supplier of the super- tonnes and a jacket of some 10,000 tonnes.
chilled fuel. Indeed, Sinopec and QP struck a TotalEnergies entered the field in July 2017
10-year supply deal in March, and reports of when QP had failed to reach a mutually-ac-
the talks signal a growing co-operation between ceptable new agreement with the longstanding
China and Qatar on LNG. incumbent, Denmark’s Maersk Oil. The French
However, with the IOCs also now bidding firm instead took a 30% stake alongside QP in
to participate in NFE, it seems that Qatar has NOC, and pledged investment of $3.5bn over
not fully turned away from Western majors yet the first five years of the 25-year agreement to
either, despite saying recently that it would not maintain and potentially increase output from
renew contracts with its current partners in the the complex field.
Qatargas 1 LNG plant. Renewed development work has been in
The 25-year contract with partners includ- progress since, and at 592,000 barrels per day
ing ExxonMobil and TotalEnergies expires next (bpd) in 2019, the last year for which data is
year, and QP will become the project’s sole owner available, accounting for around half of Qatar’s
once it comes to an end. oil production.™

Week 24 16•June•2021 www. NEWSBASE .com P7