CNOOC, China’s third-biggest oil company, has signaled its interest to become a partner in Qatar’s $29 billion North Field liquefied natural gas (LNG) expansion project, that will be the world’s largest.
Chief financial officer Xie Weizhi told reporters at a quarterly briefing last week that the Chinese national oil company (NOC) is “of course, very interested in the investment opportunity in Qatar.”
He was referring to the North Field LNG expansion project, designed to boost the Middle Eastern country’s yearly LNG output to 110 million tonnes per year (t/y) by late 2026 from 77 million t/y now, under a first phase. The North Field, situated in the Persian Gulf, is the world’s largest gas deposit and shared between Qatar and Iran.
Xie stressed that he had “no news on the progress to disclose at this point,” but said that CNOOC is “definitely interested” in the Qatari project. He added that Qatar is an “important LNG producer that we are proactively pursuing for investment opportunity.”
Qatar Petroleum chief executive and minister of state for Energy Saad al-Kaabi, said earlier this year that while Qatar is ready to develop the North Field alone, a bidding process for international oil companies to take up to a 30% stake in the project’s first phase is under way. A decision to finalise partnerships is expected by the end of this year.
ExxonMobil, Shell, Total and ConocoPhillips are all long-term partners in Qatar’s LNG export facilities and are eager to take a share in the mega-expansion scheme.
A joint venture between Chiyoda and Technip is building the first phase of the expansion project, known as North Field East. A second phase, known as North Field South, is expected to raise Qatar’s LNG production capacity further to 126 million t/y by 2027. Qatar Petroleum is also evaluating a further rise in LNG capacity beyond the 126 million t/y.
CNOOC is targeting gas production to make up over 30% of its portfolio in 2025, up from 19% now. This effort will focus on developing domestic sources, but the company is also eyeing projects overseas to meet its goals, especially “in the context of the energy transition,” said Xie.
Xie added that all overseas projects must meet a “very explicit internal guideline” on investment returns but said the North Field East scheme would pose no issue on this front.
With a long-term breakeven price of just over $4 per million British thermal units, Qatar’s LNG production is among the most competitive globally, alongside Russian Arctic projects.
Qatar Petroleum plans to issue up to $10 billion of bonds as soon as this quarter to fund the massive natural-gas project, news agencies reported yesterday.
Through the $29 billion project, Qatar will cement its status as the biggest exporter of LNG.
By pushing ahead with the expansion, Qatar is seeking to secure a foothold in new markets and squeeze out other proposed LNG export developments that have yet to take final investment decisions (FIDs).
Recommended for you
