State-owned Qatar Petroleum has announced plans to raise its LNG production by 30 per cent, from 77 million to 100 million tonnes per year, saying the new additional volumes will be secured by doubling the size of the new gas project in the southern sector of the North Field, which Qatar Petroleum had announced last April.
This would increase the North Field’s production of natural gas, condensate and other associated products by one million barrels of oil equivalent per day, Qatar Petroleum said in a statement.
Qatar, the world’s biggest LNG producer, is facing a growing competition from a tide of new LNG sources — mostly from Australia and the US.
This move shows that Qatar is not willing to easily let go the title of world’s largest LNG exporter. It also comes in wake of the ongoing diplomatic conflict between Qatar and several of its Middle East neighbours.
Gulf OPEC member Qatar has been sanctioned by Saudi Arabia, the United Arab Emirates, Egypt and Bahrain who have severed diplomatic and transport ties with Doha, accusing it of supporting terrorism. Qatar denies the charges.
The four Arab states are supposed to meet to discuss how to end the crisis or impose further sanctions on Qatar, which could include asking trade partners to pick a side in the Gulf rift.
“Qatar Petroleum will continue working…If some companies decide they don’t want to work with QP that’s their choice. We will find other foreign companies to work with,” the Qatar Petroleum statement said.
Qatar-linked vessels were banned from Saudi and UAE waters, including the major bunkering port of Fujairah after severing of diplomatic relations on 5 June. Qatari tankers are able to reach international seas through Iranian waters.
The new LNG move was announced by Saad Sherida Al-Kaabi, Chief Executive of Qatar Petroleum, at a news conference in Doha.
“Last April, we announced our intention to develop a new gas project in the southern sector of the North Field that can be targeted for export. This project will strengthen our position as the world’s largest LNG producer and exporter in line with Qatar Petroleum’s strategic growth plan and objectives of becoming one of the best national oil & gas companies in the world, with roots in Qatar and a strong international presence,” Kaabi was quoted as saying.
Global LNG demand was 265 million tons in 2016, according to Royal Dutch Shell’s annual LNG outlook. Studies have shown that between 2021 and 2024 there will be a shortage of gas because of higher demand.
Qatar Petroleum is also ending a 12-year ban on new projects at North field that allowed the company to assess how its current rate of extraction affects the giant reservoir.