Satyendra Pathak
Doha
Gas markets in Asia would continue to grow and Europe would still need more gas for the foreseeable future, Minister of State for Energy Affairs and QatarEnergy President and CEO HE Saad Sherida Al Kaabi said on Sunday.
Addressing a press conference to announce QatarEnergy’s plan to further raise Qatar’s LNG production capacity to 142 million tonnes per annum (mtpa) before the end of 2030, Al Kaabi said, "We still think there’s a big future for gas for at least 50 years forward and whenever we can technically do more, we’ll do more.”
"We see that Europe is going to need gas for a very, very long time. But the growth in Asia is definitely going to be bigger than the growth in Europe, basically driven by population growth,” he said.
Earlier during the press conference, Al Kaabi announced that a new expansion of its liquefied natural gas production named North Field West will add a further 16 million tonnes of liquefied natural gas (LNG) per year to existing expansion plans.
This latest expansion may not be the last for Qatar as Kaabi said appraisal of Qatari gas reservoirs would continue and production would be further expanded if there is amarket need.
State-owned QatarEnergy has already signed a string of supply deals with European and Asian partners in its huge North Field expansion project, which was expected — before Sunday’s announcement to begin producing 126 mtpa of LNG per annum by 2027 from 77 mtpa now.
It comes as Qatar raised the size of its gas reserves by about 14 percent to 2 quadrillion cubic feet, after new discoveries at its vast North Field gasfield, and added that significant quantities were extractable on its west side.
"Recent studies have shown that the North Field contains huge additional gas quantities estimated at 240 trillion cubic feet, which raises Qatar’s gas reserves from 1,760 [trillion cubic feet] to more than 2,000 trillion cubic feet,” said Kaabi.
"These are very important results of great dimensions,” he said.
Exploration activities in the west of North Field prompted the company’s decision to expand further.
Kaabi, however, did not give a cost for the project but said it would be in the billions of dollars.
"It is difficult to give you a number now for the cost of the expansion, but it is certainly in billions,” he said.
"We will start preliminary engineering studies for the project and then at the right time we will announce how much is the cost when the project is settled,” he said.
In December, Kaabi said that QatarEnergy had been drilling wells to assess expansion opportunities beyond the North Field East and North Field South phases.
This latest expansion will require the construction of two LNG trains, in addition to six already under way for the earlier expansions.
On partnerships for the new trains, Kaabi said QatarEnergy would go ahead and begin the engineering phase of this project on its own without seeking partners and then take a decision on partnerships later.
Demand for LNG climbed in the wake of Russia’s full-scale invasion of Ukraine in February 2022 as Europe tried to replace lost Russian pipeline volumes.
While Europe and the UK are trying to cut their reliance on natural gas to reduce carbon dioxide emissions, others are turning to the fuel as a lower carbon alternative to coal.
The latest expansion plans follow a flurry of announcements for long-term Qatari gas supply deals.
Asian countries led by China, Japan and South Korea have been the main market for Qatari gas, but demand has also grown from European countries since Russia’s war on Ukraine threw supplies into doubt.
Qatar has secured two huge gas supply deals with China over the past 15 months. Last June, it agreed to sell 4mn tonnes a year of LNG to China National Petroleum Corporation for 27 years, following a similar deal with China’s Sinopec in November 2022.
Earlier this month, Qatar said it would supply 7.5mtpa of LNG for 20 years to India’s Petronet, with the first deliveries expected from May 2028.
At the end of January, QatarEnergy announced a deal with US-based Excelerate Energy to supply Bangladesh with 1.5mtpa of LNG for 15 years.
Last year, Qatar signed LNG deals with China’s Sinopec, France’s Total, Britain’s Shell and Italy’s Eni.
The North Field is part of the world’s largest gas field that Qatar shares with Iran.
In a report this month, oil and gas supermajor Shell forecast global demand for LNG would climb by more than 50 percent to reach 625mn to 685mn tonnes by 2040, and would continue to grow during that decade, as China and developing Asian nations switched from coal to gas.