Qatar Seeks to Boost LNG by 30% to 100mn mt by 2025
Qatar Petroleum announced July 4 its intention to raise Qatar’s LNG production from its nominal 77mn metric tons/yr to 100mn mt/yr.
The plan could take up to seven years to execute but it would overturn the otherwise favourable economics of a number of other LNG projects elsewhere in the world.
The new additional volumes of ultra-low-cost LNG will be secured by doubling the size of the new gas project in the southern sector of the North Field, which QP had announced in April, thereby boosting the North Field’s daily production of gas and liquids by 1mn barrels of oil equivalent.
QP effectively ended the North Field moratorium on April 3 when it said it would develop a gas project in the field’s southern sector that would add 2bn ft³/d to the country’s export output, increasing the field’s current output by 10%.
But QP now is looking for twice that, namely a 20% increase in North Field production – and a 30% hike in LNG exports.
QP CEO Saad Sherida al-Kaabi said July 4: “Last April we announced our intention to develop a new gas project in the southern sector of the North Field that can be targeted for export. With the conclusion of further technical studies, we have decided that the best option would be to double the size of the project to 4bn ft³/d (41bn m³/yr), which constitutes a 20% increase from the current North Field production rate, or about 1mn boe/d.”
Al-Kaabi added: “After further assessment, we have decided that the best way to develop this huge project is by dedicating it to production and export of LNG, thereby increasing the production capacity of the State of Qatar from 77mn mt to 100mn mt, which means a 30% production increase. This project will strengthen our position as the world’s largest LNG producer and exporter in line with QP’s strategic growth plan and objectives of becoming one of the best national oil & gas companies in the world, with roots in Qatar and a strong international presence.
“Once completed within five to seven years from now, this project will raise the production of the State of Qatar to about 6mn boe/d,” he added.
This announcement has a whiff of bravado coming as Qatar looks set to lose its position as the world’s largest LNG exporter before the mid-2020s as both the US and Australia overtake it, and just a day after Iran signed a $4.8bn agreement with Total and Chinese state CNPC to develop the South Pars gas field’s phase 11 (SP11).
Qatar has achieved remarkable feats in the past, but attracting investment capital on this scale at a time when there is a glut of LNG exports and export capacity would be a challenge, especially as several Gulf neighbours such as Saudi Arabia and the UAE (but not Kuwait or Iran) are isolating it.
South Pars (offshore Iran) and North Field (off Qatar) are both seen as geologically the same super-giant field, so Qatar and Iran – although in recent times on relatively good diplomatic terms – have always been commercial rivals when it comes to developing offshore gas resources.
The Total-led SP11 project would have eventual capacity to produce 2bn ft³/d (20.5bn m³/yr) of gas, with Iranian state NIGC eyeing the prospects for liquefying some of that at a 10.5mn mt/yr LNG export plant – although that would require a further $6bn-$8bn investment not covered by the Total deal.
According to the International LNG Importers Group (GIIGNL), 79.62mn mt of LNG was sourced from Qatar in 2016.
A month ago, Japan's Chiyoda Corporation signed an agreement in Doha with Qatar Petroleum (QP) to conduct a detailed study to identify changes required to debottleneck the country's liquefaction trains "in order to process additional quantities of gas that will be produced from the planned North Field gas project."
Mark Smedley