Shell Joins Qatar’s LNG Expansion Mega-Project

Qatar's Minister of State for Energy Affairs and President and CEO of QatarEnergy Saad al-Kaabi (R) and Shell CEO Ben van Beurden hold a signing ceremony at QatarEnergy headquarters in Doha, on July 5, 2022. (AFP)
Qatar's Minister of State for Energy Affairs and President and CEO of QatarEnergy Saad al-Kaabi (R) and Shell CEO Ben van Beurden hold a signing ceremony at QatarEnergy headquarters in Doha, on July 5, 2022. (AFP)
TT
20

Shell Joins Qatar’s LNG Expansion Mega-Project

Qatar's Minister of State for Energy Affairs and President and CEO of QatarEnergy Saad al-Kaabi (R) and Shell CEO Ben van Beurden hold a signing ceremony at QatarEnergy headquarters in Doha, on July 5, 2022. (AFP)
Qatar's Minister of State for Energy Affairs and President and CEO of QatarEnergy Saad al-Kaabi (R) and Shell CEO Ben van Beurden hold a signing ceremony at QatarEnergy headquarters in Doha, on July 5, 2022. (AFP)

QatarEnergy on Tuesday signed a deal with Shell for the Gulf state's North Field East expansion, the first phase of the world's largest liquefied natural gas (LNG) project, following agreements with TotalEnergies, Exxon, ConocoPhillips and Eni.

Shell will take a 6.25% stake in the North Field East expansion project, QatarEnergy CEO Saad al-Kaabi told a news conference.

TotalEnergies and Exxon will also hold 6.25% stakes.

Shell is the final oil major to partner with QatarEnergy in the first and largest phase of the nearly $30 billion expansion which will boost Qatar's position as the world's top LNG exporter.

The partnership comes as Russia went ahead and seized control of one of the world's largest LNG projects - Sakhalin-2 - in which Shell has a 27.5% minus one share stake.

Shell, which has written off the value of its Russian assets, made clear months ago it intended to quit Sakhalin-2 and has been in talks with potential buyers.

In Qatar, oil majors have been bidding for four trains - or liquefaction and purification facilities - that comprise the North Field East project.

In all, the expansion plan includes six LNG trains that will ramp up Qatar's liquefaction capacity to 126 million tons per annum (mtpa) from 77 by 2027.

QatarEnergy is in talks with several buyers from around the world that are eager to enter into the project, but no final decision has been made yet, Kaabi said.

"They need to demonstrate that they can give us a price that is above the market price because they would be coming onto the best project that exists in the LNG business from a cost perspective and a return perspective," he said.

The fifth and sixth trains are part of a second phase, North Field South.

The North Field is part of the world's largest gas field which Qatar shares with Iran, which calls its share South Pars.

Shell CEO Ben Van Beurden was in Doha for the signing and met with Qatar's Emir on Tuesday.

Beurden said during the news conference that Shell was still studying Russia's decree on Sakhalin-2.

Russian President Vladimir Putin last week signed a decree that seizes full control of the Sakhalin-2 gas and oil project in Russia's far east, a move that could force out Shell as well as Japanese companies Mitsui & Co and Mitsubishi Corp.

Beurden told reporters it was too early to discuss specific plans to compensate for any loss from Sakhalin but that it was important to note that with 64 million tons of production, Shell had multiple opportunities to manage portfolio changes.

"We have multiple supply points for multiple destinations. We optimize this to great effect. We can take some of these risks on our own books," he said.

"As to whether we will need to use this in the case of Sakhalin Energy, that remains to be seen. But I have no concerns that we can manage the situation very well."



Riyadh Real Estate Awaits Impact of Measures to Curb Price Surge

Residential and commercial properties in the Saudi capital Riyadh (Reuters)
Residential and commercial properties in the Saudi capital Riyadh (Reuters)
TT
20

Riyadh Real Estate Awaits Impact of Measures to Curb Price Surge

Residential and commercial properties in the Saudi capital Riyadh (Reuters)
Residential and commercial properties in the Saudi capital Riyadh (Reuters)

The Saudi real estate market is currently in a state of cautious anticipation, driven by unprecedented decisions and measures announced by Crown Prince Mohammed bin Salman.

These steps aim to increase the supply of properties and restore balance in the market to address the rising costs of land and rental prices.

Data from the market shows a stagnation in property purchases by citizens, as they await the impact of these measures, hoping they will bring stability to property prices in Riyadh and lower costs.

In March, the Crown Prince directed the implementation of a series of regulatory measures, including lifting restrictions on the development of over 81 square kilometers of land north of Riyadh.

This move is expected to deliver tens of thousands of affordable residential plots annually to citizens, following a significant rise in property prices in Riyadh.

According to Saudi Minister of Municipal and Rural Affairs and Housing Majid Al-Hogail, these measures will add between 10,000 and 40,000 plots of land annually in the northern region of Riyadh, ensuring a better balance between supply and demand in the market.

The Crown Prince has already donated 1 billion riyals to the National Developmental Housing Foundation (Sakan), represented by Jood Eskan, to support home ownership for eligible families across Saudi Arabia.

The housing projects funded by this donation are to be completed within 12 months and executed by national companies.

The Crown Prince also ordered monthly progress reports to ensure that all residential units are delivered within one year.

Real estate market experts told Asharq Al-Awsat that current market data reveals a stagnation in property purchases by citizens, as they await the impact of recent policy changes and their potential to restore balance to the market.

Many real estate companies and agencies have observed a decline in sales activity, with property marketers facing difficulties in encouraging buyers who prefer to delay decisions until the effects of Crown Prince Mohammed bin Salman’s directives take shape.

Real estate expert and marketer Abdullah Al-Mousa told Asharq Al-Awsat that the current stagnation in property prices in Riyadh is a direct result of the Crown Prince’s initiatives to increase property supply, which aim to restore price equilibrium following the recent surge in real estate costs.

He views the decline as a positive step toward balancing supply and demand, contributing to a more sustainable and fair market for all stakeholders.

Al-Mousa anticipates that this stagnation will persist until all government directives are fully implemented in the coming months.

He noted that, with plans to increase the property supply, the market could experience gradual recovery in the long term, especially given Riyadh’s continued population and economic growth.

The expert highlighted that several factors may sustain the current stagnation, including high interest rates, which reduce citizens’ purchasing power, the oversupply of properties relative to demand, and global economic fluctuations that could affect investments.

However, he emphasized that Riyadh’s ongoing population growth, improving national economy, rising per capita income, large-scale infrastructure projects like the Riyadh Metro, and continued government support for housing programs are expected to drive the recovery of the real estate market.

Al-Mousa also predicted further improvement in the sector as policies are implemented and market conditions are monitored.