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Royal Dutch Shell has won the second international equity stake for North Field South (NFS), Phase 2 of Qatar’s 48 million ton per year LNG mega-expansion, Shell and QatarEnergy announced on Sunday.
The company was awarded a 9.375% participating interest in the two-train 16 million ton/yr NFS project out of a total 25% interest available for international partners. QatarEnergy will hold the remaining 75%.
TotalEnergies was also awarded a 9.375% stake in NFS last month.
QatarEnergy is also in the process of awarding engineering, procurement and construction (EPC) contracts for the mega expansion. Last week, Italy’s Saipem said it was awarded a $4.45 billion EPC contract for North Field.
NFS is known to have slightly higher production costs than Phase 1, “but it is still a world-class asset,” Saad al-Kaabi, Qatar’s Minister of State for Energy Affairs, and President and CEO of Qatar Energy told Energy Intelligence in an exclusive interview last month.
The Phase 2 expansion will raise Qatar’s total LNG production capacity to 126 million tons by 2027.
Signing On
At the signing ceremony in Doha, Shell CEO Ben van Beurden underlined the key role of LNG in ensuring energy system reliability and its support for energy security and the energy transition, “two of the most fundamental challenges the world faces today.”
“The new LNG volumes, which Qatar will bring to the market, come at a time when natural gas assumes greater importance in light of recent geopolitical turmoil, and amidst the dire need for cleaner energy to meet global environmental objectives,” al-Kaabi said at the ceremony.
Shell has the largest LNG portfolio of the Western majors and has focused on having a diverse set of flexible volumes for trading and optimization. QatarEnergy is already the largest single LNG producer in the world and al-Kaabi has indicated the company is making a major push into trading in addition to its array of long-term fixed supply contracts.
No Surprises
Shell and Total had also been selected for Phase 1 of the expansion – the 32 million ton/yr North Field East (NFE) project – earlier this year.
Partner selection for NFS is expected to be based on the pool of Phase 1 winners, al-Kaabi has said. They also include Exxon Mobil, ConocoPhillips and Eni.
Earlier this month, al-Kaabi told the Energy Intelligence Forum that QatarEnergy was close to selecting the remaining partners for Phase 2.
“We are done with almost everything. We are just defining the date of when my counterparts can come to Qatar to celebrate,” he said.
In its statement, Qatar Energy said that “a third partnership will be announced in due course.”
