Qatar plans to boost LNG production to 126 mln T by 20272 min read . Updated: 25 Nov 2019, 06:48 PM IST
- New expansion plans come after drilling, appraisal work
- Qatar's LNG production now is 77 million tons per year
DOHA : Qatar said on Monday it aimed to lift production of liquefied natural gas (LNG) by 64% to 126 million tonnes per year by 2027, putting oil majors racing to secure a stake in the Gulf country's expansion plans under pressure to make the best offer.
The expansion of Qatar's LNG facilities is the world's largest and one of the energy sector's most lucrative projects.
The world's top oil and gas majors have showered state energy giant Qatar Petroleum with some of their most prized ventures for a role in QP's new LNG project.
The estimated increase in Qatar's LNG production comes after new drilling and appraisal work in the expanded North Field mega project showed that confirmed gas reserves of the field exceeded 1,760 trillion cubic feet, chief executive of Qatar Petroleum Saad al-Kaabi told reporters in Doha.
"I am pleased to announce that our appraisal efforts have borne fruit, and that we have confirmation that the productive layers of the North Field extend well into Qatari land in Ras Laffan," Kaabi told a news conference.
"Studies and well tests have also confirmed the ability to produce large quantities of gas from this new sector of the North Field."
Kaabi said the latest appraisal well, NF-12, was drilled onshore in the Ras Laffan Industrial City about 12 km from the shore.
"These results will ... enable us to immediately commence the necessary engineering work for two additional LNG mega trains with a combined annual capacity of 16 million tons per annum (mtpa)," Kaabi said.
"This will raise Qatar's LNG production from currently 77 million tons to 126 million tons per annum by 2027, representing an increase of about 64%."
That would also boost Qatar's total output to 6.7 million barrels of oil equivalent per day (boed) from around 4.8 million boed in the next eight years, Kaabi said.
RIVALS CLOSE BEHIND
Qatar's plans come as LNG prices languish at multi-year lows due a surge in production of the super-chilled gas in the United States, Russia and Australia. Australia may oust Qatar from its long-held position of the world's top LNG producer this year.
"If you look at where the big growth markets are, the bulk of demand growth is forecast in South and Southeast Asia and Qatar is well placed to target those markets," Giles Farrer, research director global LNG at Wood Mackenzie, said.
But the addition of 16 mtpa on top of Qatar's already planned increase of 33 mtpa will add to the anticipated oversupply in global markets post 2025, Farrer added.
Having dwarfed other countries in LNG production thanks to the North Field, the world's biggest natural gas field it shares with Iran, Qatar faces growing rivals.
The United States, in particular, has gone from being an LNG importer five years ago to becoming the world's fourth largest last year and by 2025 it will be closing in on Qatar with production of 106 mtpa.
QP had said before it was lifting its LNG production to around 110 million tonnes per annum by 2024, and that it would build four new production facilities, known as LNG trains.
Kaabi told Reuters in September that QP has short-listed international oil firms for a stake in its expanded North Field mega project, but may still choose to go it alone unless oil majors offer it significant value.