Qatar throws down gauntlet with LNG expansion plans
Thursday, Jul 06, 2017
Qatar, which lifted the moratorium on work in its giant North Field in April, has set out plans to increase LNG production to 100 million tpy from the current level of 77 million tpy.

The statement from state-run Qatar Petroleum (QP) on July 4 came as the Gulf state is feeling the pressure ramping up from its neighbours, led by Saudi Arabia and the United Arab Emirates.

QP said the additional 23 million tpy would come from a doubling in the size of the new gas project in the south part of the North Field. The project should be completed within five to seven years.

“[In] April, we announced our intention to develop a new gas project in the southern sector of the North Field that can be targeted for export,” QP’s president and CEO, Saad Sherida Al-Kaabi, said. “With the conclusion of further technical studies, we have decided that the best option would be to double the size of the project to 4 bcf [113.3 mcm] of gas per day, which constitutes a 20% increase from the current North Field production rate, or about 1 million boepd.”

The official said the increase would “strengthen our position as the world's largest LNG producer and exporter”. The work will help cash in Qatar’s resources and stimulate the domestic economy, Al-Kaabi said, in line with the Qatar National Vision 2030.

The company did not reveal how many trains would be used to accomplish this expansion. The Qatargas 1 phase includes three trains with a total capacity of 10 million tpy, while Qatargas 2 has two trains with a total capacity of 15.6 million tpy. Given the planned scale of the increase, and the country’s technical ability, it is likely that the new trains will be large – providing economies of scale. Some incremental volume may be possible from debottlenecking existing trains.

The QP decision came as Moody’s changed the outlook on the rating for Qatar’s bonds from stable to negative, while keeping its Aa3 classification unchanged. The ratings agency said the decision had been driven by the ongoing dispute between Qatar and its GCC neighbours. Moody’s said it was becoming more likely that the spat would extend into 2018.

Lead up
QP, at the end of May, before the dispute with Saudi and the UAE, said it was working on a study with Japan’s Chiyoda on debottlenecking capacity at its LNG trains in Ras Laffan. This work was intended to take the additional gas production from the new North Field project.

Al-Kaabi, talking at the time, said it was intended to reinforce Qatar’s leading position in the gas industry. “This agreement provides Qatar Petroleum with the option of increasing its LNG production with minimum investment, by leveraging the existing massive, world-class infrastructure and valuable synergies available in Ras Laffan Industrial City.” If the study proved positive, front-end engineering and design (FEED) work was due to start early in 2018.

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