State-backed QatarEnergy has selected Shell as partner for the single largest project in the history of the liquefied natural gas (LNG) industry, expanding its roster of international companies backing the project.
The nearly $30bn expansion project already includes rival firms TotalEnergies, Exxon, ConocoPhillips and Eni.
Shell will hold a 6.25 per cent stake in the project, via a 25 per cent share in a joint venture company which owns a quarter of the project
It is expected to be the final oil major to partner with QatarEnergy in the first and largest phase of the expansion plans, which will boost Qatar’s position as the world’s top LNG exporter.
The first phase of the mega project -North Field East – includes LNG trains with a combined LNG capacity of 32 million tonnes per annum.
An LNG train is a liquefied natural gas plant’s liquefaction and purification facility.
The Gulf state’s second phase – North Field South – will eventually include a further two LNG trains that will ramp up Qatar’s overall liquefaction capacity to 126m tonnes per annum over the next five years.
The development will also be integrated with carbon capture and sequestration to reduce emissions.
QatarEnergy’s chief executive Saad al-Kaabi said any more buyers entering into the North Field East expansion would have to offer prices “above market price”.
The North Field is part of the world’s largest gas field which Qatar shares with Iran, which calls its share South Pars.
Shell CEO Ben Van Beurden was in Doha for the signing and met with Qatar’s Emir Tamim bin Hamad Al Thani on Tuesday.
He said: ““This agreement deepens our strategic partnership with QatarEnergy which includes multiple international partnerships such as the world-class Pearl GTL asset. We are committed to maximize the value of the LNG expansion for the State of Qatar and continue to be a trusted, reliable and long-term partner in Qatar’s continued progress.”
LNG is an increasingly vital resource for meeting the West’s energy needs, with Russia’s strangling gas flows into Europe amid widespread speculation it will cut off flows entirely ahead of winter.
The European Union staved off supply shortages last winter courtesy of top-ups from the US – making the ramp up in supplies in the Middle East a welcome potential addition over the coming years.