Page 6 - MEOG Week 20 2021

MEOG COMMENTARY MEOG

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.

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

P6 www. NEWSBASE .com Week 20 19•May•2021