QP Shortlists Partners for LNG Expansion
Qatar Petroleum (QP) has shortlisted a “select few” investment partners for a mega-train expansion in its LNG production capability, CEO Saad Sherida al-Kaabi told the Oil & Money conference in London on October 8. But the state-owned company could still decide to proceed with the project on its own, he said.
QP aims to launch four more 8mn mt/yr LNG trains under the North Field Expansion (NEF) project, raising Qatar’s overall production capacity to 110mn mt/yr. The four trains are set to come on stream at intervals of three-to-six months, al-Kaabi said, although the exact schedule will depend on contractors’ work. What is not in doubt is that first gas from the expansion will come in 2024, regardless of potential oversupply on the global market, he said.
All upstream contracts for the expansion have been awarded, but a contract for constructing the LNG trains has not been handed out yet and will go to only one company, the CEO said. Potential partners will be selected depending on what additional opportunities they offer – whether it is market access or offtake deals, he added.
The CEO went on to say that QP would be the lowest-cost supplier in the future. The bulk of the company’s LNG production is price-indexed to oil benchmarks with a delay. Meanwhile, low oil prices have posed a difficulty to new gas-to-liquids (GTL) projects which convert gas into motor fuels, he said.
“It doesn’t work in a low-price environment, and the transport of LNG is also getting easier,” he said, noting that the gas market was growing at a faster pay than the liquids demand.
The European Commission is still investigating Qatar for alleged breaches of competition law, so far without any results, a senior QP executive told NGW on the sidelines of the conference. The EC launched its probe last year into whether agreements between QP and European importers had hindered competition in LNG trade.