QatarEnergy, TotalEnergies to Collaborate on North Field East Project

Signing the agreement between QatarEnergy and TotalEnergies on Sunday (Asharq Al-Awsat)
Signing the agreement between QatarEnergy and TotalEnergies on Sunday (Asharq Al-Awsat)
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QatarEnergy, TotalEnergies to Collaborate on North Field East Project

Signing the agreement between QatarEnergy and TotalEnergies on Sunday (Asharq Al-Awsat)
Signing the agreement between QatarEnergy and TotalEnergies on Sunday (Asharq Al-Awsat)

QatarEnergy signed a partnership deal with France's TotalEnergies on Sunday for the North Field East expansion of the world's largest liquefied natural gas (LNG) project.

QatarEnergy's chief executive said more partners would be announced in the coming days.

The Gulf state is partnering with international energy companies in the first and largest phase of a nearly $30 billion expansion of the North Field project.

Saad al-Kaabi, Qatar’s energy minister and head of Qatar Energy, said the selection process for partners has been finalized and subsequent signings could be announced as soon as next week.

No company will have a stake higher than TotalEnergies, he added.

TotalEnergies Chief Executive Patrick Pouyanne said the company will have 25 percent of one train - or liquefaction and purification facility - in the project.

Known as the North Field Expansion (NFE), the plan includes six mega LNG trains to scale its liquefaction capacity from 77 million tons per annum to 126 mtpa by 2027.

Kaabi said Qatar has a unified approach, where all four trains are considered one unit.

TotalEnergies' 25 percent stake in one virtual train gives it around 6.25 percent of the whole four trains.

"We had announced that we are no longer investing in any new project in Russia, so the signing of this project in Qatar is important for us," said Pouyanne.

Kaabi said once the investments have been completed, Asian buyers are expected to make up half the market for the project, and buyers in Europe the rest.

Exxon Mobil Corp, Shell, ConocoPhillips and Eni will also participate in the North Field expansion, sources said.

The project will boost Qatar's position as the world's top LNG exporter and help to guarantee long-term supply of gas to Europe as the continent seeks alternatives to Russian flows, said people with knowledge of the matter.

The NFE project is set to boost Qatar’s position as the world’s top LNG exporter. It will also help to guarantee long term supply of gas to Europe after the shortage produced as a consequence of Russia’s invasion of Ukraine.

The top oil and gas producers have been eager to secure a stake in the project, but Qatar's strategy has been to raise the bar on what it expects from potential partners.

QatarEnergy has waited nearly five years to sign partnership agreements and has emphasized that it has abundant capital to self-finance the project.

Total, Exxon, Shell, Italy's Eni and Chevron have offered QatarEnergy opportunities to invest in prize assets they hold overseas. That move has helped QatarEnergy transform into a significant international player, with stakes in petrochemical facilities and oil blocks around the world, from South Africa to Suriname.



Oil Edges Up on Strong US GDP Data

A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
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Oil Edges Up on Strong US GDP Data

A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo

Oil prices were up slightly on Friday on stronger-than-expected US economic data that raised investor expectations for increasing crude oil demand from the world's largest energy consumer.

But concerns about soft economic conditions in Asia's biggest economies, China and Japan, capped gains.

Brent crude futures for September rose 7 cents to $82.44 a barrel by 0014 GMT. US West Texas Intermediate crude for September increased 4 cents to $78.32 per barrel, Reuters reported.

In the second quarter, the US economy grew at a faster-than-expected annualised rate of 2.8% as consumers spent more and businesses increased investments, Commerce Department data showed. Economists polled by Reuters had predicted US gross domestic product would grow by 2.0% over the period.

At the same time, inflation pressures eased, which kept intact expectations that the Federal Reserve would move forward with a September interest rate cut. Lower interest rates tend to boost economic activity, which can spur oil demand.

Still, continued signs of trouble in parts of Asia limited oil price gains.

Core consumer prices in Japan's capital were up 2.2% in July from a year earlier, data showed on Friday, raising market expectations of an interest rate hike in the near term.

But an index that strips away energy costs, seen as a better gauge of underlying price trends, rose at the slowest annual pace in nearly two years, suggesting that price hikes are moderating due to soft consumption.

China, the world's biggest crude importer, surprised markets for a second time this week by conducting an unscheduled lending operation on Thursday at steeply lower rates, suggesting authorities are trying to provide heavier monetary stimulus to prop up the economy.