QatarEnergy awards $10 bn gas contract to Technip Energies, CCC

QatarEnergy said Tuesday it awarded a contract worth about $10 billion to a joint venture of France's Technip Energies and Consolidated Contractors Company, in the Gulf emirate's latest major gas deal.

The state-owned hydrocarbon giant said the contract was for the engineering, procurement and construction of the North Field South (NFS) project.

It put the value of the deal at "around $10 billion" and said its "scope covers the construction of two mega" liquefied natural gas trains with a combined capacity of 16 million tonnes per year.

"Technip holds a comfortable majority of the capital," a source close to the French company told AFP. Consolidated Contractors Company (CCC) is a global engineering and construction firm.

The LNG trains, together with further expansion of North Field East (NFE), would boost Qatar's total production 126 million tonnes per year from 77 million tonnes, QatarEnergy said.

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NFS and NFE form the wider North Field Expansion project to increase Qatar's LNG production by 60 percent to 126 million tonnes a year by 2027.

The North Field contains the world's biggest natural gas reserves and extends under the Gulf into Iranian territory.

QatarEnergy said it holds a 75 percent interest in the NFS project and has already signed partnership agreements with TotalEnergies, Shell and ConocoPhillips for the remaining 25 percent.

Qatar's Energy Minister Saad Sherida al-Kaabi, who is also QatarEnergy's chief, called the latest deal "another significant milestone in the world's largest LNG project".

He said the project would focus on carbon capture and storage (CCS) to minimise its overall carbon footprint.

"It includes one of the largest CO2 capture and sequestration facilities," Kaabi said.

It "constitutes an important step towards achieving QatarEnergy's target of more than 11 MTPA of CO2 capture and sequestration by 2035".

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According to Technip, the CCS facility would lead to "25 percent-plus reduction of greenhouse gas emissions when compared to similar LNG facilities".

Gas boom

Asian countries led by China, Japan and South Korea have been the main market for Qatar's gas, but it has been increasingly targeted by European countries since Russia's war on Ukraine threw supplies into doubt.

In November, Qatar announced its first major deal to send liquefied natural gas to Germany.

Up to two million tonnes of gas a year would be sent for at least 15 years from 2026, Kaabi said at the time.

That same month, QatarEnergy announced a 27-year natural gas supply deal with China, calling it the "longest" ever seen.

The state energy company said it would send four million tonnes of liquefied natural gas annually from the North Field East project to China Petroleum and Chemical Corporation (Sinopec).

Qatar is one of the world's top LNG producers, alongside the United States, Australia and Russia.

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Qatar Energy estimates the North Field holds about 10 percent of the world's known natural gas reserves.

The offshore reserves extend over the maritime border with Iran, whose efforts to exploit its adjacent South Pars field have been hindered by US sanctions.

Qatar's gas is among the cheapest to produce and has fuelled an economic boom in the tiny Gulf emirate, which is now one of the world's wealthiest countries.

Source: AFP