Iran Energy News Oil, Gas, Petrochemical and Energy Field Specialized Channel
Related Articles
QatarEnergy signed a 27-year deal with Eni SPA to supply up to one million tons per annum (MMtpa) of Qatari liquefied natural gas (LNG) to Italy.
The signing in Doha follows separate LNG contracts scored by state-owned QatarEnergy from two other European energy heavyweights in France’s TotalEnergies SE and Britain’s Shell PLC.
On October 18 QatarEnergy announced two agreements with Shell for the supply of LNG at up to 3.5 MMtpa for 27 years, meant for the Netherlands and to be sourced from Qatar.
On October 11 it bared two deals to supply TotalEnergies with a maximum of 3.5 MMtpa of LNG for 27 years, to be sourced from Qatar for distribution in France.
QatarEnergy will begin delivery for the LNG supply for France, Italy and the Netherlands in 2026, according to QatarEnergy’s announcements of the separate agreements.
It did not disclose the values of the contracts.
QatarEnergy’s swoop into Europe’s gas market pits it with the USA as an alternative exporter for the region amid the European Union’s bid to wean itself off Russian fossil fuels.
“Together, we will continue to demonstrate commitment to the European markets in general, and to the Italian market in particular”, QatarEnergy president and chief executive Saad Sherida Al-Kaabi said in a company press release Monday announcing the agreement with Eni.
Qatar has been among the world’s biggest LNG exporters alongside Australia, Russia and the USA. The Gulf state had held the top spot until Australia overtook it in 2021, when Qatar exported about 3.77 trillion cubic feet (106.8 billion cubic meters), according to BP PLC’s 2022 annual review of the energy market.
Asia-Pacific has been Qatar’s traditional market, accounting for about 2.72 trillion cubic feet (76.9 billion cubic meters) of the region’s LNG imports 2021 and 2.86 trillion cubic feet (81.1 billion cubic meters) 2022, according to the last two BP yearly energy reviews.
But Europe is a growing market for Qatari gas amid the region’s pivot away from its traditional exporter Russia in the aftermath of the Putin regime’s invasion of Ukraine February 2022. The EU targets to phase out Russian fossil fuels by 2027, according to an official declaration March 11, 2022.
Qatar was the EU’s third-largest LNG supplier in the first quarter of 2023 accounting for 12 percent or 130.66 billion cubic feet (3.7 billion cubic meters), according to the 27-nation bloc’s quarterly gas market report published October 6. The USA was top accounting for 41.5 percent, while Russia was second with 19 percent, according to the report.
The LNG supply for France, Italy and the Netherlands under the agreements with TotalEnergies, Eni and Shell respectively will come from the North Field expansion projects, where all three companies have stakes.
TotalEnergies holds a 6.25 percent share in the North Field East expansion project, planned to produce 32 MMtpa, and 9.375 percent in the North Field South expansion project, designed with a 16 MMtpa capacity.
Shell also holds 6.25 percent ownership in the east project and 9.375 percent in the south one.
Eni is a partner in the east project with a 3.125 percent share.
The 2.3-square mile North Field, discovered 1971, is about half of Qatar’s land area and is the largest gas field in the world, according to QatarEnergy. It has averaged over 700 million cubic feet per day in gas production, QatarEnergy says on its website.
QatarEnergy had already awarded the engineering and procurement contracts for both expansion projects and on October 3 announced the start of construction.
The east and south expansions will raise Qatar’s LNG production capacity to 126 MMtpa by 2026, according to the company.
