Qatar’s state-owned oil and gas company QatarEnergy commenced the North Field East (NFE) project in 2020 to expand its liquefied natural gas (LNG) production capacity from 77 million tons per annum (MTPA) to 110 MTPA, which is also the first phase of the project. The project’s second phase, the North Field South (NFS), will further boost the country’s LNG production capacity to 126 MTPA.
The 32 MTPA NFE project, earlier known as the North Field Expansion project, was announced in April 2017, following Qatar’s lift of a self-imposed 12-year ban refraining from any gas development plans.
Located in Ras Laffan, in northeast Qatar, the project strengthens the country’s position as a reliable, responsive, and low-cost supplier due to its large and efficient production capacity, an agile logistics network, and a resilient market position.
QatarEnergy signs multiple agreements for North Field East project
In a series of announcements from June 2022, QatarEnergy revealed partnership agreements with four global oil giants: TotalEnergies, Eni, ConocoPhillips, and ExxonMobil for the NFE project.
Commenting on the partnership agreements, HE Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, the President and CEO of QatarEnergy and chairman of Qatargas, said: “This is a historic landmark for Qatar’s energy industry and the world’s largest LNG development. The North Field East project is an iconic achievement that will not only ensure the optimal utilisation of Qatar’s natural resources but will also provide the world with the cleaner and more reliable energy it needs.
“Today, QatarEnergy is standing at the threshold of a new era with a stronger commitment to energy transition and to the safe, reliable, and trustworthy access to cleaner energy. We will continue to power lives in every corner of the world for a better tomorrow for all. This is our commitment.”
TotalEnergies
Following the request for proposals in the north field project, TotalEnergies was the first company to come on board, winning a 25% interest in a new joint venture (JV) alongside QatarEnergy, which owned the remaining 75%. The new JV will hold a 25% interest in the NFE project, equivalent to one 8 MTPA LNG train.
“TotalEnergies was present at the beginning of its LNG industry in Qatar some 30 years ago through its interest in Qatargas 1, and then Qatargas 2 in 2005. We are very proud that Qatar has chosen TotalEnergies again, this time as the first partner for its new major phase of LNG expansion.
“With its low costs and low greenhouse gas emissions – thanks to carbon capture and storage – the North Field expansion will be an exemplary and major contribution to our low-carbon LNG growth strategy,” Patrick Pouyanné, chairman and CEO of TotalEnergies, said in a statement at the time.
ExxonMobil
Similarly, ExxonMobil has also been awarded a 25% stake in a JV with QatarEnergy, which will hold the majority stake. According to a statement from ExxonMobil, with the north field project, its participation in Qatar’s LNG volumes is expected to increase from 52 to 60 MTPA.
Eni and ConocoPhillips
Meanwhile, Eni and ConocoPhillips’ JVs will own 12.5% each of the entire NFE project. Similar to the other partnerships, each of the companies will hold a 25% interest in the JV that will be formed with QatarEnergy.
Eni said that the agreement marks the completion of a competitive process that began in 2019, and has a duration of 27 years. The company notes that this is a strategic move which will expand its presence in the Middle East and provide it with access to a world-leading LNG producer.
Claudio Descalzi, CEO of Eni, added: “As a newcomer joining this world-leading LNG project, we feel the privilege and the responsibility of being a strategic partner of choice for the State of Qatar.
“This agreement is a significant milestone for Eni and fits our objective to diversify into cleaner and more reliable energy sources in line with our decarbonisation strategy.”
In summary, TotalEnergies and ExxonMobil will each own a 6.25% stake in the north field east project, while Eni and ConocoPhillips own around 3.12% each. The project’s first phase includes four liquefaction and purification facilities or LNG trains, while the fifth and sixth trains are part of the second phase. Previous contracts awarded for the north field east project also include engineering, procurement, and construction (EPC) and front-end engineering and design (FEED) works.
North Field East project commenced in 2020
QatarEnergy in April 2022 marked a major milestone in delivering the north field east project by selecting a JV between Técnicas Reunidas and Wison Engineering as the EPC contractor. The scope of work includes expanding sulphur handling, storage, and loading facilities within the Ras Laffan Industrial City.
Meanwhile, McDermott was awarded a major EPCI contract by Qatargas in January 2022 for the offshore scope of the north field east project.
In an April 2022 interview with Oil and Gas Middle East, McDermott noted that the contract’s base scope includes eight normally unmanned wellhead platform topsides with an option for a further five, 13 in total, and pipelines and power cables, beach valve stations and buildings.
Additionally, in October 2021, a ground-breaking ceremony was held to commemorate the start of construction of four new LNG production mega-trains (EPC-1) in the Ras Laffan Industrial City, with JV partners Chiyoda Corporation and Technip France SAS, respectively.
On this, HE Al-Kaabi, noted: “The commencement of the physical construction of the new LNG mega-trains represents an important new chapter in Qatar’s economic development and in helping fulfil the goals of the Qatar National Vision 2030.”
Prior to this, in early 2021, the north field east project had gained massive momentum with the accomplishment of two significant milestones. The first being the installation of the final four offshore jackets in late 2020 by McDermott, and the second was the signing of the ‘Letter of Award’ for the construction of four new mega trains.
“The commencement of the physical construction of the new LNG mega-trains represents an important new chapter in Qatar’s economic development and in helping fulfil the goals of the Qatar National Vision 2030.”
Commenting on the difficulties of achieving this momentous milestone during the pandemic, HE Al-Kaabi in the first quarter of Q1, said: “The completion of the offshore jacket installations is a critical part of the overall expansion project and has been delivered in a timely manner with an excellent performance on safety and quality.
“I would like to congratulate Qatargas and McDermott on this significant achievement. We appreciate their collaboration with Qatar Petroleum while managing the difficult circumstances brought about by the global pandemic.”
QatarEnergy’s sustainability initiative
In keeping with Qatargas’ approach to environmental management and aligning with the goals of Qatar National Vision 2030, which envisions preserving the environment for future generations, the North Field project is also being constructed to the highest environmental standards, QatarEnergy has said.
In an announcement made on 27 June, QatarEnergy noted that it has joined the ‘Aiming for Zero’ initiative, which is targeted towards eliminating methane footprint by 2030. Noted oil and gas giants such as Saudi Aramco, ExxonMobil, Chevron, bp, Eni, Shell, and Total Energies are existing members of the initiative.
This includes incorporating the best available technologies to reduce air and water emissions. In addition, enhanced waste heat recovery, boil-off gas recovery and feed gas CO2 capture will also deliver a 25% reduction in greenhouse gas (GHG) emissions relative to previous Qatargas mega trains.
While climate action initiatives have heavily focused on limiting CO2 emissions in the last few years, sustainability enthusiasts are increasingly shifting their attention to methane as it locks in far more heat in the short term and is a critical component of the climate fight. As LNG continues to grow in the energy mix, methane reduction will be key.