France’s TotalEnergies has signed a $1.5 billion investment agreement in expanding Qatar’s natural gas production as Europe rushes to find new energy sources to replace Russian supplies.
TotalEnergies Chief Executive Patrick Pouyanne, who traveled to Doha for the agreement signing, said the deal came at a "perfect time" to help resolve Europe's energy crisis.
President and CEO of QatarEnergy, Saad al Kaabi, said on Saturday that TotalEnergies would hold 9.375 percent of the 25 percent allocated to international partners in the North Field South gas project. QatarEnergy retains a majority share of 75 percent.
Kaabi added that QatarEnergy was always talking to buyers globally whether in Europe or Asia and would continue to do so for commercial contracts for the expansion project as per market needs.
“Half of our production normally goes East and half goes West, this equation may be the same or may be 60% to 40% according to market needs, it is a supply and demand matter,” Kaabi said.
German utilities RWE and Uniper are close to striking long-term deals to buy liquefied natural gas (LNG) from Qatar's North Field Expansion project to help replace Russian gas, Reuters quoted unnamed sources as saying.
Talks between Germany and Qatar have been fraught with differences over key conditions such as the length of contracts and pricing but the industry sources, who declined to be named, said the parties were expected to reach a compromise soon.
German Chancellor Olaf Scholz will travel to Saudi Arabia on Saturday for a two-day visit to the Gulf region that will also take him to the United Arab Emirates and Qatar.
The North Field Expansion project includes six LNG trains that will ramp up Qatar's liquefaction capacity from 77 million tons per annum (mtpa) to 126 mtpa by 2027.
TotalEnergies has already signed a deal for a stake in the NFE project and on Saturday became the first international partner to be announced for the NFS expansion that includes two trains.
It awarded contracts for the first phase of the expansion project, North Field East (NFE), which includes four trains, earlier this year.
Pouyanne said the world would need "so much gas" by 2025-2027 and that TotalEnergies was not overexposed to Qatar. "If Qatar had offered more investment then we would have invested more in Qatar," he said.