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QatarEnergy awarded a $10 billion contract to France’s Technip Energies and Consolidated Contractors Company, the company said on Tuesday.
QatarEnergy said on Tuesday that the $10 billion project, awarded to Technip and Middle-Eastern-based CCC, is for engineering, procurement, and construction of its North Field South (NFS) project—home to the world’s largest natural gas reserves.
The project covers two LNG trains with 16 million tonnes per year of combined capacity. The capacity should increase Qatar’s total production to 126 million tonnes per year—up from its current 77 million tonnes per year.
QatarEnergy holds a 75% stake in the NFS project, with the remaining quarter share held by TotalEnergies, Shell, and ConocoPhillips.
QatarEnergy has offered assurances that the NFS project has significant CO2 capture and sequestration facilities that will help the country to meet its goal of capturing and sequestering more than 11 million tonnes of C02 per year by 2035.
Qatar has made strides in securing ultra-long-term gas supply deals—particularly with China. In November, QatarEnergy signed the longest-term contract in the history of the LNG industry when it signed a 27-year deal with China’s Sinopec. Then in February, sources said that QatarEnergy was on the cusp of signing another long-term LNG deal, this time with CNPC.
Long-term supply deals with Qatar would enable China to stay above the fray when it comes to spot price volatility, no matter how much competition there is in the marketplace from places such as Europe as it tries to steer clear of Russian gas.
QatarEnergy estimates that the North Field holds about 10 percent of the world’s known natural gas reserves. The field sprawls across the border with Iran.
Qatar is also one of the lowest-cost natural gas producers in the world, breaking even at less than $5/MMBtu landed into Asia as of last February, according to S&P Global Platts.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.