Qatar Petroleum takes FID on North Field East

Qatar Petroleum announced that it has taken final investment decision (FID) on the North Field East project.

Wood Mackenzie research director Giles Farrer said: “At 32 million tonnes per annum (mmtpa), this is the largest single LNG project sanctioned in history and at US$28.75 billion is likely to be the biggest project sanctioned across the global upstream business this year.

“At a long-term breakeven price of just over $4 per million British thermal units, it’s right at the bottom of the global LNG cost curve, alongside Arctic Russian projects.

“Qatar is pursuing market share. This FID is likely to put pressure on other pre-FID LNG suppliers, who may find Qatar has secured a foothold in new markets.

“As long-term contracts to sell LNG from some of its existing projects expire and Qatar adds new capacity from North Field East and Golden Pass in the US, Qatar is going increasingly long on volume.

“We estimate it will have over 75 mmtpa of uncontracted LNG volume to sell by 2027, around 70% of its LNG portfolio. Qatar’s decision to construct a carbon capture and storage facility, as well as additional environmental investments, shows that LNG suppliers are increasingly putting focus on ways that they can mitigate their carbon emissions.

“This focus on low-cost supply and carbon emissions is proving attractive to buyers. Last year, QP Trading won a tender to supply Pavilion Energy with 1.8 mmtpa of LNG under a 10-year contract, with specific provisions for assessing and measuring the emissions associated with each LNG cargo delivered.

“The award of the engineering, procurement and construction contract to Chiyoda and Technip is not a surprise given their historic involvement in the existing trains, but will be welcome news, particularly for Chiyoda, after some of its recent challenges building projects in the US and Indonesia.”