Natural gas: TotalEnergies invests even more in Qatar

published on Saturday, September 24, 2022 at 8:04 p.m.

The French energy giant has signed a new $1.5 billion deal with QatarEnergy for the development of the world’s largest natural gas field, a field that would be the biggest “climate bomb”.

Qatar announced on Saturday, September 24, the signing of a major contract worth $1.5 billion with French oil and gas giant TotalEnergies for the development of the world’s largest natural gas field. The announcement comes amid an energy crisis in Europe triggered by Russia’s war in Ukraine, TotalEnergies CEO Patrick Pouyanné and QatarEnergy (QE) Energy Minister and CEO Saad Sherida Al-Kaabi said. stressing the importance of long-term contracts to secure Europe’s energy supply.

“QatarEnergy (QE) has selected TotalEnergies as the first foreign partner for the development of the North Field South (NFS) natural gas field,” the Qatari hydrocarbons giant said in a statement.

“The strengthened strategic role” of TotalEnergies

The French giant had already signed an agreement worth more than 2,000 million dollars with Doha in June for the development of the North Field East (NFE) project.

North Field South and North Field East are expansion projects for the North Field offshore field, the world’s largest natural gas field that Qatar shares with Iran.

Saturday’s agreement was signed in Doha by Messrs. Kaabi and Pouyanne. TotalEnergies will invest 1,500 million dollars in the new projectsaid Mr. Pouyanné during a joint press conference with the Qatari minister. TotalEnergies “will have an enhanced strategic role” in gas development in Qatar, Mr Kaabi said.

According to QE, TotalEnergies’ participation in this project is 9.375%, while Qatar has set the total participation of foreign companies at 25%. “Other partners will be selected at a later stage,” according to the Qatari news agency QNA.

North Field represents approximately 10% of the world’s known natural gas reserves, according to QE. It extends under the sea to Iran, which is struggling to exploit its share of the field due to international sanctions.

Qatar, one of the main producers of LNG in the world and whose gas is one of the cheapest to produce, wants to increase its production by more than 60% to reach 110 million tons in 2027.

South Korea, Japan and China are the main clients, as Europe has long opposed the long-term deals desired by the emirate. But after the war in Ukraine, LNG importers are rushing to secure alternatives to Russian gas.

“We need new capabilities”

The total stoppage of Russian gas deliveries through the Nord Stream gas pipeline since September 2 has raised fears in Europe of a serious energy crisis this winter. “We definitely need new capabilities and (this investment) is timely”the CEO of TotalEnergies said on Saturday.

“Most of the leaders in the world now know (the importance) of LNG,” he added, advocating long-term contracts. “The question is simple, the longer (the contract), the better the price for the buyer,” he said. “If you want a cheap price for a short time, the answer will be ‘no’, Mr. Pouyanné insisted.

According to a survey conducted by guardianpublished last May, Natural gas is the biggest climate bomb, emitting more than a billion tons of CO2.

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