With a global increase in LNG demand during the past decade, hitting all-time highs almost every year since 2015, Qatar Petroleum (QP) and other oil giants are excited to grow their LNG output to strengthen their position during this major shift in energy supply and demand.
Earlier this year, QP took a final investment decision on the North Field East gas development project in the Persian Gulf. Despite offering relatively low returns, six top western energy firms competed to partner in the vast expansion of Qatar’s liquefied natural gas output.
Energy Minister and QP CEO Saad Sherida Al-Kaabi stated that Qatar Petroleum was in the process of evaluating commercial offers received for participation in the largest LNG development in the world with a capacity of 32 million tons per annum of LNG, and that Qatar Petroleum had received offers that cover double the offered equity stake. Al-Kaabi also noted that as part of the same process, Qatar Petroleum had received offtake commitments/ sales and purchase agreements for double the 32 million tons per annum volume on offer.
These remarks were made during a Qatar Economic Forum session on “Energy Shifts” in which Al-Kaabi was a panellist along with Ben van Beurden, the CEO of Royal Dutch Shell, Patrick Pouyanné, the Chairman and CEO of TotalEnergies and Darren Woods, the Chairman and CEO of ExxonMobil.
The nearly $30 billion NFE project is unique in the LNG world because of its advanced environmental characteristics, including significant carbon capture and sequestration capacity.
In discussing the ongoing energy transition,Al-Kaabi said “We see natural gas and the energy transition -joined at the hip- and gas/ LNG is part of the solution for a longer term transition. We are investing the majority of our CAPEX in LNG, but we are also investing in renewables such as solar, here in Qatar but also worldwide.”
However, Al-Kaabi voiced concern that during the global discussion on energy transition, there is a lack of investment in oil and gas projects, which could drive energy prices higher by stating that “while gas and LNG are important for the energy transition, there is a lack of investments that could cause a significant shortage in gas between 2025-2030, which in turn could cause a spike in the gas market.”
The panellists warned that energy transition is not only about the producers, but also about end users and their consuming behaviours. Al-Kaabi also highlighted the fact that the energy transition needs to take into consideration the requirements of the developing world, including the 0.8-1.0 billion people who are deprived of electricity and basic fuels today to ensure a balanced approach that takes human development and economic growth in these developing nations into account, and that actions taken need to be responsible for the collective wellbeing of all of humanity.
To conclude, Al-Kaabi called for collective work for a carbon pricing mechanism that is fair and equitable and that can be applied seamlessly on a global basis. His Excellency also highlighted that Qatar started decarbonising its LNG a while ago and that they “are doing it very responsibly and we will be part of the solution for the long term.”
