TotalEnergies takes $2 billion foothold in Qatar’s gas expansion project

Doha, Qatar – (AFP): France’s energy giant TotalEnergies will spend an estimated $2 billion for a 6.25-percent share of the giant North Field East project in Qatar.

The project will help Qatar increase its liquefied natural gas (LNG) production by more than 60 percent by 2027, TotalEnergies chief executive Patrick Pouyanne said.

Qatar’s Energy Minister Saad Sherida al-Kaabi called the joint venture “a marriage more than an engagement” as it will last until 2054.

Other foreign firms will also take stakes in North Field with state-owned Qatar Energy (QE) but none will be bigger than TotalEnergies, said Kaabi, who did not reveal names.

Industry sources say ExxonMobil, Shell and ConocoPhillips are all in line to take part in the giant $28-billion expansion, that Qatar had originally wanted to finance alone.

“We have finished the selection process and we have signed the agreements,” Kaabi said, adding that names would be announced in the “near future”.

With European nations scrambling to find alternatives to Russian oil and gas, LNG from North Field is expected to start coming online in 2026.

Without giving figures, Pouyanne indicated that Qatar had demanded a high price in the talks that started in 2019.

“Your team and yourself have been very good defenders of Qatar’s interests in this project,” he said in comments to the minister who is also the QE chief.

“Qatar Energy certainly drove a hard bargain. But for the biggest global LNG players like Shell and TotalEnergies, Qatar is too good to pass up. A stake in these LNG trains delivers scale, low-cost supply, great marketing opportunities, and a good partner,” said Ben Cahill, an energy security specialist at the Center for Security and International Studies in Washington.

Qatar is already one of the world’s top LNG producers, alongside the United States and Australia.

QE estimates that North Field holds about 10 percent of the world’s known natural gas reserves.

The reserves extend under the sea into Iranian territory, where Tehran’s efforts to exploit its South Pars gas field have been hindered by international sanctions.

South Korea, Japan and China have become the main markets for Qatar’s LNG but since an energy crisis hit Europe last year, the Gulf state has helped Britain with extra supplies and also announced a cooperation deal with Germany.

The Ukraine conflict has also injected a new urgency into efforts around the world to develop new sources.