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.
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.
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