Six top western energy firms are vying to partner in the vast expansion of Qatar’s liquefied natural gas output, industry sources said, helping the Gulf state cement its position as the leading LNG producer while several large projects around the world remain stalled.
Exxon Mobil, Royal Dutch Shell, TotalEnergies and ConocoPhillips, which are part of Qatar’s existing LNG production were joined by new entrants Chevron and Italy’s Eni in submitting bids on May 24 for the expansion project, reports Reuters.
Unlike Qatar’s early LNG projects in the 1990s and 2000s when the country relied heavily on international oil companies’ technical expertise and deep pockets, the country’s national oil company Qatar Petroleum (QP) has gone ahead alone with the development of the nearly $30 billion North Field expansion project.
It is, in fact, seeking to partner with the oil majors in order to share the financial risk of the development and help sell the additional volumes of LNG it will produce.
Qatar plans to grow its LNG output by 40% to 110 million tonnes per annum (mtpa) by 2026, strengthening its position as the world leading exporter of the super-chilled fuel.
Leading energy companies see natural gas as a key fuel in the world’s efforts to cut carbon emissions and replace the more polluting coal, although the International Energy Agency said in a report last month that investments in new fossil fuel projects should stop immediately in order to meet U.N.-backed targets aimed at limiting global warming.
Global LNG demand has increased every year since 2012 and hit record highs every year since 2015 mostly due to fast-rising demand in Asia. Analysts have said they expect global LNG demand will grow about 3-5% each year between 2021 and 2025.
Qatar is also in talks to make Chinese firms partners in the project. Last month Qatar Petroleum hired international banks for a multi-billion dollar debut public bond sale by the end of June to help in part development the Northern Field project.