TotalEnergies takes $2bn foothold in Qatar’s giant gas expansion

DOHA: Qatar on Sunday named France’s TotalEnergies as its first foreign partner to expand the world’s largest natural gas field and eventually help ease Europe’s energy fears.

The French energy major will spend an estimated $2 billion for a 6.25-percent share of the giant North Field East project that will help Qatar increase its liquefied natural gas (LNG) production by more than 60 percent by 2027, TotalEnergies chief executive Patrick Pouyanne told AFP.

Qatar’s Energy Minister Saad Sherida al-Kaabi called the joint venture “a marriage more than an engagement” as it will last until 2054.

Other foreign firms will also take stakes in North Field with state-owned Qatar Energy (QE) but none will be bigger than TotalEnergies, said Kaabi, who did not reveal names.

Industry sources say ExxonMobil, Shell and ConocoPhillips are all in line to take part in the giant $28-billion expansion, that Qatar had originally wanted to finance alone.

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“We have finished the selection process and we have signed the agreements,” Kaabi said, adding that names would be announced in the “near future”.

With European nations scrambling to find alternatives to Russian oil and gas, LNG from North Field is expected to start coming on line in 2026.

Pouyanne said the company’s biggest deal with Qatar would help make up for the company’s withdrawal from Russia in the wake of the Ukraine invasion.

“Some were asking the question what would TotalEnergies do in place of Russia, this is the answer,” Pouyanne told AFP.

“We have also announced projects in the United States, now we have added Qatar to the portfolio. We are number two in the world for natural gas and intend to stay there.”

Without giving figures, Pouyanne indicated that Qatar had demanded a high price in the talks that started in 2019.

“Your team and yourself have been a very good defender of Qatar’s interests in this project,” he said in comments to the minister who is also the QE chief.

“Qatar Energy certainly drove a hard bargain. But for the biggest global LNG players like Shell and TotalEnergies, Qatar is too good to pass up. A stake in these LNG trains delivers scale, low-cost supply, great marketing opportunities, and a good partner,” said Ben Cahill, an energy security specialist at the Center for Security and International Studies in Washington.

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