Qatar delays partnerships for natgas expansion

      Published on Wednesday, 19 February , 2020      661 Views     
Qatar delays partnerships for natgas expansion

  • Government

Qatar has delayed choosing Western partners for the world’s largest liquefied natural gas (LNG) project by several months after surprising the industry with a big expansion plan despite a collapse in global gas prices, four sources told Reuters.

State-run Qatar Petroleum (QP) declined to comment on the reported delay, which comes as the global gas industry faces the major challenge of a supply glut due to booming U.S. production and a drop in Chinese demand, Kallanish Energy understands.





Qatar, the lowest cost producer of LNG, sits on the world’s largest gas field and offers terms that led oil supermajors ExxonMobil and Royal Dutch/Shell to invest tens of billions of dollars in past projects.

The big energy firms have waited a decade for a new opportunity to invest in Qatar after the country put further development on hold to ensure the giant North Field could sustain production, Reuters reported.

The moratorium was lifted two years ago and QP shortlisted six Western majors for the next phase of expansion. QP didn’t disclose the names, but said it would announce partners in the first quarter of 2020, Reuters reported.

But late last year QP said it had decided to expand LNG production by 60%, to 126 million tonnes a year (Mtpa) by 2027, instead of the original plan for a 40% increase.

QP didn’t say it would delay the partnerships, but four sources involved in the talks told Reuters the company planned to take more time. 

Three other sources familiar with the talks confirmed a delay to at least the middle of 2020, because the scaling up of the expansion, combined with a much lower gas price outlook, were affecting every aspect of potential partnerships.

QP did not say how much it would cost to build six more LNG trains and develop offshore production facilities.

One standard LNG train with capacity of 8 Mtpa costs roughly $10 billion, meaning QP would need to spend at least $60 billion on the expansion.



A number of LNG projects around the world from Canada to Mozambique and Nigeria — and certainly the U.S. — is expected to lead to an even bigger oversupply later this decade.


Keywords:
Category Government | 2020/02/19 latest update at 4:05 PM
Source : Internet | Photocredit : Google
662 Views
Comments Add comment



Gulf Media

Related Articles

The editorial staff of Qatar Today would like to give all of its readers from Gulf and Qatar and the whole world the opportunity to participate actively in the development of the website! If you have something interesting, fun, scandalous - just something worth to be seen from more people. Capture it and share it in the Qatar Today with a short text.

Do you have information you want to reach our readers?

Send article/s

You can subscribe to our Facebook, Twitter and Google pages or use our RSS feed channel to always read the most important news about Qatar, the Gulf and the world.