Sunday, August 14, 2022

Baghdad

ConocoPhillips joins Qatar’s mega gas expansion

 ConocoPhillips joins Qatar’s mega gas expansion

Qatar’s Energy Minister and CEO of QatarEnergy Saad Sherida al-Kaabi (R) and Ryan Lance, CEO of American multinational corporation ConocoPhillips, attend a signing ceremony in Doha

Doha – ConocoPhillips on Monday became the first US energy giant to sign up to help Qatar’s massive natural gas expansion that has drawn global bidders anxious to assure new supplies.

ConocoPhillips’ chunk of the North Field East project is half the size of France’s TotalEnergies, which has a 6.25 percent share, but the same as Italy’s ENI, announced on Sunday, Energy Minister Saad Sherida al-Kaabi told a press conference at which the accord was signed.

No figure for the value of the deal was given but TotalEnergies previously said it had paid $2 billion for its joint venture.

The expansion of the North Field, which has the world’s biggest known natural gas reserves, is estimated to cost more than $28 billion, and will see production increase from the current 77 million tonnes a year to 110 million tonnes by 2027.

The project has taken on growing international importance because of the fallout from the Russian invasion of Ukraine on Europe’s energy supplies.

The joint venture between ConocoPhillips and the state-owned Qatar Energy will last 27 years, but Kaabi said he expected gas from the North Field to last more than 50 years.

The reserves extend into Iranian territory and make up about 10 percent of the world’s known reserves, according to Qatar Energy. 

ConocoPhillips chairman Ryan Lance hailed the deal, saying it would be the “best in the world”.

“The LNG here in Qatar is needed to power world economic prosperity and to help protect against climate change,” he added.

Qatar is expected to announce more partners in the coming days, with ExxonMobil of the United States, Britain’s Shell and Chinese state energy firms among the names mentioned by industry sources as likely contenders. China is already one of the biggest customers for Qatari liquefied natural gas (LNG).

Foreign companies are expected to hold about 25 percent of the project in all.

Kaabi said there was “zero diplomatic element” in the decision on the companies taking part. He said the price paid, technical “competency” and ability to give access to new markets were the key elements determining the selection.

Qatar’s gas is among the cheapest to produce and has fuelled the Gulf state’s economic miracle of the past four decades. It is expected to announce details of another expansion, the North Field South, in coming months.