'Largest LNG Project Ever:' Qatar Petroleum Sanctions North Field East Project

February 9, 2021

Credit: Qatar Petroleum
Credit: Qatar Petroleum

Qatar Petroleum on Monday took the final investment decision for the development on the North Field East Project (NFE), in what the company said was the world’s largest LNG project ever. The total cost of the project is estimated at $28.75 billion.

The project will raise Qatar’s LNG production capacity from 77 million tons per annum (MMTPA) to 110 MMTPA.  The North Field is the world’s single largest non-associated offshore natural gas field.

In addition to LNG, the project will produce condensate, LPG, ethane, sulfur and helium. It is expected to start production in the fourth quarter of 2025 and its total production will reach about 1.4 million barrels oil equivalent per day.

The decision to proceed with the investment was announced during a signing ceremony held Monday for the execution of the project’s key onshore engineering, procurement and construction (EPC) contract. 

The contract was signed by Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, the President and CEO of Qatar Petroleum, Kazushi Okawa, the Chairman of the Board and CEO of Chiyoda Corporation, and Arnaud Pieton, the President of Technip Energies, in the attendance of senior executives from Qatar Petroleum, Qatargas, Chiyoda, and Technip.

The main scope of the EPC contract is the construction of 4 mega LNG trains with a capacity of 8 MMTPA each, with associated facilities for gas treatment, natural gas liquids recovery, as well as helium extraction and refining within Ras Laffan Industrial City.

Speaking at the signing ceremony,  Al-Kaabi said: “The execution of this EPC contract marks the commencement of the construction of the North Field East LNG Project, and is a significant landmark in Qatar Petroleum's strategic growth journey in a sustainable manner. 

"The total cost of the NFE project will be 28.75 billion dollars, making it one of the energy industry’s largest investments in the past few years, in addition to being the largest LNG capacity addition ever, and the most competitive LNG project in the world. This project will generate substantial revenues for the state of Qatar and will have significant benefits to all sectors of the Qatari economy during the construction phase and beyond.”

Al-Kaabi said that the project will also have  CO2 capture and sequestration (CCS) system that will be integrated with QP's wider CCS scheme in Ras Laffan,  which - once fully operational- "will be the largest of its kind in terms of capacity in the LNG industry, and will be one of the largest ever developed anywhere in the world." 



Woodmac: Largest single LNG project sanctioned in history

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.  Credit: QP

"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.”

The NFE project represents the first phase of LNG expansion in the State of Qatar, while the second phase, referred to as the North Field South Project (NFS), will further increase Qatar’s LNG production capacity from 110 MMTPA to 126 MMTPA. With an expected production start date in 2027, the NFS project involves the construction of two additional mega LNG trains (with a capacity of 8 MMTPA each) and associated offshore and onshore facilities, Qatar Petroleum said Monday.

The NFS project was initiated as a result of Qatar Petroleum’s successful onshore appraisal activities in the North Field and targets the monetization of gas from the southern sector of the North Field. As these appraisal activities continue, Qatar Petroleum is evaluating further LNG capacity expansions beyond 126 MMTPA, the company said.




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