By TBY | Qatar | Feb 07, 2023
With the demand for Qatar’s LNG being on the rise, QatarEnergy is repositioning itself to almost double output within five years.
Qatar, the biggest liquefied natural gas exporter in the world, has been urged to ramp up its production since the beginning of 2022 to replace Russia’s energy exports to Europe.
The peninsular Gulf nation currently produces some 77million metric tons of LNG each year, but QatarEnergy is planning to raise its output according to a five-year roadmap.
If all goes according to plan, by 2027, QatarEnergy will export 126 million tons per year, contributing remarkably to the world’s energy security and almost doubling its income into the bargain.
Quite conveniently, the rise of global demand for energy coincides with the coming into production of the country’s famous North Field, which is believed to be the world’s largest natural gas and gas condensate reservoir, holding as much as 50 trillion cubic meters of natural gas.
The field was long disputed between Iran and Qatar, but it has recently come to light that the field stretches further southward toward Qatar’s territorial waters than what was previously believed. As such, Qatar is perfectly free to tap into the productive layers of the North Field near Ras Laffan.
“During the past two years, [QatarEnergy] worked diligently to determine the degree to which the North Field extends toward the southwest, as well as the possibility of production from Qatar’s northern coastal onshore areas,” revealed Saad Sherida Al-Kaabi, the country’s Energy Minister who simultaneously serves as the President & CEO of QatarEnergy.
The top energy executive told the press as early as 2019 that no doubts remain about Qatar’s right to tap into the reservoir or the feasibility of the enterprise.
Ramping up LNG production is not possible without the construction of infrastructure such liquefaction plants, storage tanks, and loading facilities.
Since the news about Qatar’s rights to North Field, Qatar Petroleum has been expanding its infrastructure to keep up with the rise in production. The engineering work is at an advanced stage at the moment, and several contracts have been awarded.
In April 2022, a large-scale engineering, procurement and construction (EPC) contract was awarded to a Spanish-Chinese consortium to begin work on LNG storage and loading facilities in Ras Laffan industrial city, not far from the southernmost extremity of the North Field.
A major public-private partnership regarding North Field East was finalized in June 2022 between QatarEnergy and the American petroleum giant, ExxonMobil. The deal is likely to raise LNG production from the current figure of 77 million tons per year to 110 million tons.
North Field East will be fully owned by a joint venture comprising QatarEnergy (75%) and ExxonMobil (25%). Four massive liquefaction plants (LNG trains) with the combined capacity of 32 million tons per year will be designed and constructed by the joint venture company.
Qatar’s past success stories in the hydrocarbon sector largely relied on its progressive attitude to working with international companies, which also created synergy in the sector.
The long-term presence of Shell which constructed Pearl GTL, one of the largest gas-to-liquid (GTL) facilities in the region, is a case in point. Shell Qatar invested USD20 billion in the country’s hydrocarbon sector, while also paving the way for knowledge transfer.
“If we combine the capabilities and skillsets of QatarEnergy with the capabilities and technology of Shell, we can come up with extremely creative solutions to progress both companies through the energy transition. It is a win-win for both companies,” Rick Tallant, managing director and chairman of Shell Qatar, told the TBY team in the country.
It is true that as far as hydrocarbon fuels go, LNG is one of the cleanest ones, but LNG trains can create hazardous byproducts if they are not constructed and operated with the highest standards.
Given the sharp increase in LNG production over the next five years, the Ministry of Energy will be highly conscious about the implementation of eco-friendly practices across the sector.
Indeed, the Amir has personally emphasized this point.
Sheikh Tamim bin Hamad Al Thani explained during an energy summit in February 2022 that the North Field project will see a huge investment in eco-friendly technologies. The facilities will be equipped with carbon recapture solutions, while the sector will do its best to minimize the pollution caused by the shipping of the LNG.
QatarEnergy is launching a shipbuilding program to expand its fleet of LNG carriers, and the new additions to the fleet will employ the latest and cleanest technologies. Qatar will award EPC contracts to reputable Japanese and Chinese shipbuilders, according to Al-Kaab.
The momentum created by the rise of activities across the LNG sector will be reflected in Qatar’s economic growth. The country’s GDP grew by 3% in 2021, during its post-pandemic recovery. This year, however, it is expected that the growth rate will exceed 4.9% “on the heels of boosted hydrocarbon exports of 10%,” according to the World Bank.