Expansion of the North Field... giant Qatari steps toward the throne of liquefied gas

Qatari Minister of State for Energy Affairs Saad bin Sherida Al-Kaabi announces the increase in Qatar’s production capacity of liquefied natural gas (QNA)

Doha -

In light of the increasing global demand for clean energy, the State of Qatar seeks to strengthen its role as one of the most prominent international players in the production and export of liquefied natural gas worldwide, by enhancing investment in its exploration and production and expanding the scope of exploration for new gas fields.

Qatar recently announced plans to expand the North West LNG field, with the aim of raising production capacity to 142 million tons annually by 2030, an increase of up to 85% from current levels.

The Qatari Minister of State for Energy Affairs, Saad bin Sherida Al-Kaabi, said - in a press conference in Doha - that the new expansion will add another 16 million tons annually to the current expansion plans, adding that it is too early to talk about partners in the new expansion.

Al-Kaabi announced that recent studies have shown that the North Field contains huge additional quantities of gas estimated at about 240 trillion cubic feet, which raises the gas reserves in Qatar from 1,760 to two thousand trillion cubic feet, and the quantities of condensates from 70 to 80 billion barrels, in addition to large quantities. Of liquefied petroleum gas, ethane and helium gas.

The largest gas exporter

This project would consolidate Qatar's position as the largest exporter of liquefied gas in the world, as it is expected to capture a 30% share of the global market by 2030.

Qatar will also benefit from the growing demand for natural gas as a cleaner fuel alternative to coal and oil, especially in major Asian markets such as China, India and South Korea, in addition to European markets.

However, the main challenge facing Qatar is to ensure the sustainability of the huge investments needed for these expansion projects, in light of fluctuations in energy prices and intense competition in global markets.

The first phase of the North East Field expansion project was launched at the beginning of last October.

The North Gas Field is the largest gas field in the world, containing 50.97 trillion cubic meters of gas, and its area is about 9,700 square kilometers, of which 6,000 are in Qatar’s territorial waters. It was discovered in 1971, and production began in 1989.

The total international contracts to develop the North East Field reach $28.75 billion.

It contains about 10% of the world's known natural gas reserves, according to Qatar Energy estimates.

Asian countries, led by China, Japan and South Korea, represent the main market for Qatari gas, but it is receiving increasing demand from European countries seeking to reduce their dependence on Russia in this field since the Russian war on Ukraine in 2022.

The latest expansion plans follow the announcement of a number of long-term gas supply contracts.

Youssef Abu Haliqa believes that increasing Qatar’s production will contribute to relieving pressure on the global market (Qatari press)

Significant impact

Qatar announced earlier this month that it would supply the Indian government company Petronet with liquefied natural gas for 20 years.

It explained at the time that it would supply the Indian company with 7.5 million tons of liquefied natural gas annually, starting in May 2028.

Last month, Qatar Energy Company announced the signing of an agreement with the US-based company, Excelerate Energy, to supply Bangladesh with up to one million tons annually of liquefied natural gas for 15 years.

The year 2023 witnessed the signing of a series of long-term agreements in this field with the Chinese “Sinopec”, the French “Total Energy”, the British “Shell” and the Italian “Eni”.

These agreements, all of which extend for 27 years, are the longest in the history of liquefied natural gas production.

Commenting on this, Qatari economic expert Yousef Abu Haliqa says that Qatar’s expansion in liquefied natural gas production, especially the “Northwest Field” project, will have a major impact on the global gas market, noting that increasing Qatar’s production capacity by 85% will enhance its position as one of The largest producer of liquefied gas in the world, it will contribute to meeting the growing demand for clean energy.

Abu Haliqa said, in an interview with Al Jazeera Net, that increased production by Qatar may affect other major producers in the gas market, as it may cause increased competition, which may lead to a change in gas prices and the distribution of shares in the market. However, it must Note that there is an increasing demand for liquefied natural gas in the world, and it is expected that future markets will absorb this increase in production.

Regarding the current market situation and whether there is a shortage of gas;

This requires an increase in its production. The Qatari economist adds that the global market may witness some shortage of natural gas, especially with the increasing demand for clean energy and the shift of many countries to using natural gas as a primary source of energy. Therefore, increasing Qatar’s production will meet part of this demand. It contributes to relieving pressure on the market.

However, he believes that there are challenges facing Qatar in increasing liquefied natural gas production, including the challenges of securing financing, human resources and the necessary infrastructure, especially as it seeks to sign long-term contracts to supply liquefied natural gas to several countries, which may require intense negotiations and challenges. In contract and supply management.

Al Khater stressed the need for Qatar to enhance its competitiveness and innovation in the field of clean energy to maintain its leading position (Al Jazeera)

Big chance

Qatar's expansion of liquefied natural gas production represents a great opportunity for the country to strengthen its role in the global energy market and meet the growing demand for clean gas. However, Doha must face economic and regulatory challenges to successfully achieve this increase in production, according to Abu Haliqa.

For his part, economic expert Abdullah Al Khater confirms that the new Qatari expansion will contribute to securing the global energy market by meeting the growing demand for energy, especially clean energy. It is expected that this expansion will support global economic stability and contribute to avoiding repercussions similar to those that resulted from the crisis. Ukrainian, such as increased inflation and interest rates.

Al Khater believes, in an interview with Al Jazeera Net, that the new expansion will enhance Qatar's position as a major supplier of clean energy and liquefied gas, in addition to its contribution to strengthening the local economy, increasing the state's financial revenues, and enhancing the role of the sovereign fund in global investments.

He points out that the demand for energy, especially gas, as it is a clean and essential source, will increase in the coming years, and Qatar can meet this demand and meet global needs.

Al Khater also points out that once Qatar begins implementing the new expansion of the North Field, it will be able to increase its global investments and enhance its role in international organizations concerned with clean energy and environmental sustainability, in addition to strengthening its international relations, increasing its economic and political influence in the global community, providing new job opportunities, and promoting social and economic development. .

He stresses the need to take into account that large expansions may face potential challenges and risks, saying that there may be a negative environmental impact as a result of that expansion, such as pollution resulting from construction and operation work, which requires taking measures to reduce its negative impacts on the environment and the health of local residents.

Qatar may also face challenges regarding global competitiveness in the energy market, as there are other countries working to increase their production and provide clean energy.

Al Khater stresses that Doha must be aware of global developments and work to enhance its competitiveness and innovation in the field of clean energy to maintain its leading position, in addition to dealing with potential challenges with caution and taking measures to reduce negative impacts and ensure environmental and economic sustainability in the long term.

Source: Al Jazeera