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    Qatar Plans More LNG Trains Following Upstream Work

Summary

As the glut of LNG has led to buyers leaving paid-for cargoes with the seller, this announcement has come at a bad time for project operators.

by: William Powell

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NGW News Alert, Natural Gas & LNG News, Middle East, Liquified Natural Gas (LNG), Premium, Corporate, Exploration & Production, Political, News By Country, Qatar

Qatar Plans More LNG Trains Following Upstream Work

Qatar Petroleum will raise Qatar’s LNG production capacity to 126mn metric tons/yr by 2027, representing an increase of 64% from the current 77mn mt/yr, it said November 25, as it announced two new mega-trains each of 8mn mt/yr output capacity.

The news will further depress gas producers in countries with higher-cost gas reserves, which is almost everywhere; although some US gas has a negative price owing to the oil that is the real goal.

Saad Sherida Al-Kaabi, the minister of state for energy and also the CEO of Qatar Petroleum, told reporters that new studies have revealed that the North Field’s productive layers extend well into Qatari land in Ras Laffan, paving the way for a new LNG production project in the north of Qatar.

He said: “During the past two years, Qatar Petroleum worked diligently to determine the degree to which the North Field extends towards the south west, as well as the possibility of production from Qatar’s northern coastal onshore areas.

“I am pleased to announce that our appraisal efforts have borne fruit, and that we have confirmation that the productive layers of the North Field extend well into Qatari land in Ras Laffan. Studies and well tests have also confirmed the ability to produce large quantities of gas from this new sector of the North Field,” he said.

The latest North Field appraisal well (NF-12) was drilled onshore in the Ras Laffan Industrial City, about 12 km from shore and underwent extensive testing over the past few months.

The confirmed gas reserves of the North Field exceed 1.760 quadrillion cubic feet, in addition to more than 70bn barrels of condensates, and massive quantities of LPG, ethane, and helium, QP said. It is these by-products of gas that make the economics so good.

Al-Kaabi said: “These are very important findings, which will have a great positive impact on Qatar’s gas industry, and which will move it forward into bigger and wider horizons. These results will also enable us to immediately commence the necessary engineering work for two additional LNG mega-trains with a combined annual capacity of 16mn mt/yr. This will raise Qatar’s LNG production from currently 77mn mt to 126mn mt/yr by 2027, representing an increase of about 64%. It will also raise Qatar’s overall hydrocarbon production to about 6.7mn barrels oil equivalent/day.”

QP has awarded all the contracts for the original four-train, 32mn mt/yr expansion. It has not yet announced whether it will work with a partner on this work or if it will bear all the costs and rewards alone. But it has been talking to potential unnamed partners to see what they can contribute, in terms of upstream access abroad or marketing experience.

Last week, four US midstream projects with a combined capacity of about 50mn mt/yr of LNG and cost of $40bn had regulatory approval, while news broke that Singaporean Pavilion Energy had opted to not take delivery of a cargo it had bought, as it could not make the economics work.