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Qatar Petroleum selected Chiyoda Corp. and TechnipFMC Plc for the main construction contract to expand its liquefied natural gas production capacity by 43%.
Qatar’s energy minister and QP Chief Executive Officer Saad Al-Kaabi signed the agreement, worth about $13 billion, with the two companies at a ceremony in Doha on Monday. The expansion project’s total cost will be $28.75 billion, he said.
“This was the main contract we were waiting to sign to finalize the costs of the project,” said Kaabi. QP will award an agreement to build storage tanks within the next two weeks and will sign almost all other project-related deals by the end of the year, he said.
Qatar is the world’s biggest LNG producer, with a capacity of at least 77 million tons per year. However, its market dominance has been eroded by new developments elsewhere, most notably in Australia. The new project is the world’s biggest LNG project under development and will lift Qatar’s annual output to 110 million tons.
With its long-term break even price at about $4 per million British thermal units, Qatar’s North Field East project is “right at the bottom of the global LNG cost curve, alongside Arctic Russian projects,” Wood Mackenzie research director Giles Farrer said in an emailed note to media.
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Qatar is in talks with Exxon Mobil Corp., Chevron Corp. and ConocoPhillips, as well as other oil companies, as potential joint venture partners to take a 30% stake in the expansion project, Kaabi said. QP will issue tender documents to the companies next week and choose a partner by the end of the year or opt to develop the project alone, he said.
Each of the shareholders would be responsible for funding their own portions of the investment, he said. Several Asian LNG buyers are also keen to invest in the project and QP is assessing these offers too, he said.
First gas for the LNG expansion project will be produced starting in the fourth quarter of 2025 and each of the four LNG trains, or production lines, will start operating at three- to six-month intervals so that it’s fully commissioned by late-2026 or early-2027. Each train has a capacity of 8 million tons per year, “but we know they can do more,” Kaabi said.
Baker Hughes Co. won a contract in September to supply three gas turbines and six centrifugal compressors to each of the four new trains.
Qatar plans to increase its production capacity even more — to 126 million tons per annum — by 2027. QP won’t need a full tender process because most of the contracts signed for the first expansion include options for the next phase, including fixed prices. It may only need to seek bids to provide two additional LNG trains, said Kaabi.
QP’s also evaluating further expansion plans. “We’re looking to monetize our field in the fastest way possible,” he said.
Qatar had a self-imposed moratorium on developing its portion of the North Field, the world’s biggest gas deposit that it shares with Iran, between 2005 and 2017.
