On Saturday, Qatar announced the signing of a major contract with French oil and gas giant TotalEnergies to develop the world’s largest natural gas field amid an energy crisis in Europe caused by Russia’s war in Ukraine.
“QatarEnergy (QE) has selected TotalEnergies as its first foreign partner for the development of the North Field South (NFS) natural gas field,” the Qatari oil giant announced in a statement.
In June, the French giant already signed an agreement with Doha worth more than $2 billion to develop the North Field East (NFE) project.
North Field South and North Field East are expansion projects for the offshore North Field, the world’s largest natural gas field, which Qatar shares with Iran.
TotalEnergies will play a strategic role
Saturday’s agreement was signed in Doha by Saad Sherida Al Kaabi, Qatar’s Minister of Energy and QE’s Chief Executive Officer, and TotalEnergies’ Chief Executive Patrick Pouyanne.
The new agreement will require an additional investment of $1.5 billion, Pouyanne said at a joint press conference with the Qatari minister.
According to Kaabi, TotalEnergies will “play a stronger strategic role” in Qatar’s gas development.
According to QE, TotalEnergies’ stake in the project is 9.375%, given that Qatar has limited the total share of foreign companies to 25%.
“Other partners will be chosen later,” the Qatari news agency QNA reported.
The largest field of natural gas in the world
According to QE, the North field represents about 10% of the world’s known natural gas reserves. It extends under the sea into the territory of Iran, where efforts by the Islamic Republic to exploit its part of the field are hampered by international sanctions.
Qatar is already one of the world’s leading producers of LNG (liquefied natural gas), alongside the US and Australia.
Doha wants to increase production by more than 60 percent to 110 million tons by 2027. South Korea, Japan and China are major customers, while Europe has long opposed the long-term deals the emirate wants.
But in the wake of the war in Ukraine, LNG importers are trying to find alternatives to Russian gas.
“We definitely need new capacity and (this investment) is timely,” TotalEnergies’ CEO said on Saturday.
Europe said it could pay more
“Most world leaders now know (the importance of) LNG,” he added, saying European countries need to make more long-term investments and pay a potentially higher price to secure their energy supplies.
“There is a price (to be paid) to ensure supply,” he said.
The announcement comes as German Chancellor Olaf Scholz begins a tour of the Persian Gulf on Saturday, visiting Saudi Arabia, the United Arab Emirates and Qatar.
Kaabi, who is due to meet with Scholz on Sunday, declined to comment on ongoing talks with European countries, but said some of those talks were “in a more advanced state” than others.
He also confirmed that Doha is in talks with Great Britain.
In June, Italian energy giant Eni was selected as the second foreign partner after France’s TotalEnergies to develop the North Field East project, which is due to start production in 2026.
(article photo: © Giuseppemasci | Dreamstime.com)
Source: Hot News RO
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