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    Qatar selects TotalEnergies for NFE JV [Gas In Transition]


TotalEnergies has been chosen as its first IOC partner in the joint venture for the North Field East development. [Gas in Transition, Volume 2, Issue 6]

by: Ian Simm

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Qatar selects TotalEnergies for NFE JV [Gas In Transition]

TotalEnergies was chosen as the first international firm to take part in a joint venture (JV) to support the development of Qatar’s North Field East (NFE) LNG project. The announcement follows a protracted, two-year bidding process, hotly contested by some of the world’s largest international oil and gas companies.

The French major will take a 25% stake in the NFE JV, to which QatarEnergy will apportion a 25% share in the overall, $28.75bn, 32mn metric ton/year project. This will give TotalEnergies a 6.25% equity stake in the development alongside the 16.7% stake it holds in the Qatargas 2 Train 5 JV. It also has a 30% shareholding in North Oil Co. (NOC), which is responsible for the development of Al-Shaheen, Qatar’s largest oilfield with a production capacity of around 600,000 barrels/day – just under half of the national total.

NFE encompasses an 80-well drilling campaign – which kicked off in 2020 –, the installation of eight offshore platforms and tie-back infrastructure as well as the four LNG trains. These will be fed with 6bn ft3/day of gas from the upstream section of the project.

NFE is envisaged to dramatically increase Qatari LNG output when it comes operational in late 2025, before ramping up and raising total capacity from 77mn mt/yr currently to 110mn mt/yr by 2027. The JV agreement was signed for a term of 32 years, with Qatar’s Energy Minister and QatarEnergy’s President and CEO Saad Sherida Al-Kaabi describing the deal as “marriage more than an engagement”.


TotalEnergies was widely reported to be joined by Chevron, ConocoPhillips and ExxonMobil of the US, Italian firm Eni and UK-listed Shell in submitting bids to QatarEnergy just over a year ago.

However, with the phase accounting for the largest ever LNG expansion and a project of key strategic importance to Doha, QatarEnergy is understood to have pushed hard during negotiations, confident in its position atop the lion’s share of the world’s largest gas field. This accords the company a significant competitive price advantage over the US and Australia, which have been battling it out for top spot in terms of LNG exports.

Al-Kaabi said another partner would be announced later in the week, with reports suggesting that it could be ExxonMobil. Given that the company already holds stakes in five of the eight LNG train JVs, such an assumption appears to be conventional wisdom. However, unlike with Qatargas 2 Train 4 & 5, Ras Laffan 1, 2 & 3, the US firm will have to settle for a less prominent position, with Al-Kaabi saying that no company will make a larger investment in the project than TotalEnergies. In light of NFE’s importance, it would appear an odd time for QatarEnergies to reduce its own shareholding below the 63% it holds in RL1 – the least of the eight JVs.

Meanwhile, despite no financials having been made available, with Al-Kaabi previously indicating that international partners could provide up to 30% of the project’s funding, it is not a stretch to suggest that another 5% in the JV will be awarded. This would see TotalEnergies cover $7.2bn of the project with the partner to be named on the hook for $1.44bn.

NFE awards

The formation of the NFE JV follows a string of big-ticket contract awards since a final investment decision was taken last year.

Italy’s Saipem was awarded a $1.7bn engineering, procurement, construction and installation (EPCI) covering offshore facilities; Samsung C&T won a $2bn lump-sum EPC deal to expand LNG storage and loading facilities at Ras Laffan; and a JV of Chiyoda and Technip Industries won $13bn worth of EPC work for the construction of the four LNG and associated facilities.

QatarEnergy has been almost as prolific this year. In January, US-based McDermott picked up a $3-4bn EPCI deal covering the offshore scope of NFE, including wellhead platform topsides and connecting pipelines, as well as work on a further expansion phase, North Field South, contingent on an FID being taken.

In April, a consortium of Spain’s Tecnicas Reunidas (TR) and China’s Wison Engineering had a lump-sum contract from 2021 extended for EPC work to expand sulphur-handling, storage, and loading facilities at Ras Laffan, again helping cater to the planned NFS.


Al-Kaabi said this week that the NFS FID is expected to be taken by the end of the year. This phase would raise liquefaction capacity to 126mn mt/yr by 2027. While Qatar was prepared to come in for greater media attention in 2022 thanks to its hosting of the FIFA World Cup, conflict in Ukraine has focused attention on Doha several months earlier as European leaders have been queuing up to discuss potential energy sector collaboration as a means of reducing to zero Russian imports.

Al-Kaabi noted that QatarEnergy was prepared to invest in the development of new regasification terminals in Germany, but he has previously said that the company would not break contracts with existing suppliers. As economic recovery from the pandemic continues and concern about supplies continues, it seems highly likely that QatarEnergy will proceed with the NFS project. Al-Kaabi alluded to this during the press conference to mark the signing of the NGE deal: “The tightness in the LNG market is now […] But with North Field East and North Field South we should have a lot of extra volumes. A lot of buyers are talking to us, whether it’s in Europe or Asia.”

While production grows and demand remains high, the company has also maintained its momentum in the midstream, placing a $852mn deal last week with South Korean shipbuilder DSME for four more LNG carriers under a $19bn fleet expansion programme. These are scheduled to arrive in 2025, just in time to begin delivering LNG cargoes sourced from NFE. With just eight vessels of a potential 100 ordered and another four under long-term charter, more shipbuilding deals should be anticipated alongside the unveiling of another NFE partner and a final decision on NFS.