Qatar North Field LNG Terminal

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Qatar North Field LNG Terminal is an LNG terminal under construction in the Persian Gulf offshore Qatar. It will be the world's largest LNG project.

Location

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Project details

North Field East Expansion (Phase 1)

• Owner: QatarEnergy (72.5%), TotalEnergies (6.25%), Shell (6.25%), ExxonMobil (6.25%), ConocoPhillips (3.125%), Eni (3.125%), Sinopec (1.25%), CNPC (1.25%).
• Parent: QatarEnergy (72.5%), TotalEnergies (6.25%), Shell (6.25%), ExxonMobil (6.25%), ConocoPhillips (3.125%), Eni (3.125%), Sinopec (1.25%), CNPC (1.25%).
• Location: Persian Gulf offshore Qatar
• Coordinates: 26.327561, 51.670498 (approximate)
• Capacity: 33 mtpa
• Trains: 4 megatrains
• Cost: US$28.75 billion
• Financing: Part financing from a US$12.5 billion bond issue
• Status: Construction
• FID: FID (2021)
• Type: Export
• Start year: Trains 1-2: 2026; Trains 3-4: 2027
  • Formerly Trains 1-2: 2026; Trains 3-4: 2026–2027
  • Formerly Trains 1–2: 2025; Trains 3–4: 2026

North Field South Expansion (Phase 2)

• Owner: QatarEnergy (75%), TotalEnergies (9.375%), Shell (9.375%), ConocoPhillips (6.25%).
• Parent: QatarEnergy (75%), TotalEnergies (9.375%), Shell (9.375%), ConocoPhillips (6.25%).
• Location: Persian Gulf offshore Qatar
• Coordinates: 26.327561, 51.670498 (approximate)
• Capacity: 16 mtpa
• Trains: 2 megatrains
• Status: Proposed
• FID: Pre-FID (2022) (delayed)
• Type: Export
• Cost: US$15-20 billion
• Start year: 2027

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

The North Field project was originally announced in September 2018 with the release of a plan to build four 8-mtpa trains and bring them online every six months beginning in 2023. In November 2019 QatarEnergy, then Qatar Petroleum, announced plans to build two additional 8-mtpa trains and commission them by 2027. In April 2020 it was announced that commissioning of the first two trains has been delayed until 2025 due to logistical and economic problems caused by the Covid-19 pandemic.

The first four trains, called the North Field East Expansion will be developed as the first phase of the project. The last two trains, called the North Field South Expansion, will be developed as the second phase of the project.

The project will increase Qatar’s LNG production capacity by about 50%, and will produce LNG, condensate, LPG, ethane, sulphur, and helium. The project also includes a carbon capture and storage (CCS) facility to capture CO2 emissions from the project. The CCS facility will be the largest of its kind in the LNG industry, and will be part of a CO2 capture and storage cluster in Ras Laffan in Qatar. Power for the facility will be sourced from an 800 MW solar power plant under construction nearby.

In February 2021, QatarEnergy took the final investment decision (FID) for trains 1-4 of the project, known as Qatar North Field East, at the same time awarding a US$13 billion onshore engineering, procurement, construction and commissioning contract for the project to Japanese engineering group Chiyoda and the French company Technip Energies. The cost of the project was placed at US$28.75 billion.

In March 2021, QatarEnergy secured two sale and purchase agreements with Chinese companies Guangdong Energy Group Natural Gas Company Limited and S&T International for the supply of 2 million - 1 million tonnes of LNG per year each for periods of 10 and 15 years, respectively. In that same month, QatarEnergy awarded a US$2 billion engineering, procurement, and construction contract to Samsung C&T Corporation for the execution of works on the North Field East Expansion project.

QatarEnergy said that it would release detailed plans for the North Field South project within a year of March 2021.

In April 2021, both the French energy major Total and CNOOC, one of China's three major state-owned oil and gas producers, publicly expressed their interest in joining the project.

Qatar Petroleum changed its name to QatarEnergy in October 2021.

In April 2022, QatarEnergy awarded a major engineering, procurement, and construction (EPC) contract for the North Field East LNG expansion to a JV between Técnicas Reunidas and Wison.

In July 2022, QatarEnergy announced that it had concluded signing partnership contracts with five global companies (Shell, ExxonMobil, ConocoPhillips, Eni, and TotalEnergies) for the North Field East Expansion, the first phase of the project. With a collective investment of over US$7 billion dollars, these companies hold a combined 25% of stakes in the project (see Project Details).

Later that year, in September 2022, QatarEnergy selected three international partners for the development of the second phase of the project, the North Field South Expansion. TotalEnergies was selected as the first partner in the project, with a 9.375% stake out of the total 25% stake being offered to international partners. In October 2022, Shell and ConocoPhillips joined as the second and third partners, with participating stakes of 9.375% and 6.25%, respectively, leaving a 75% stake for QatarEnergy.

In November 2022, QatarEnergy signed an LNG supply deal with Chinese firm Sinopec to provide 4 million tonnes of LNG per year for a period of 27 years in what was, at the time, the longest LNG contract signed by Qatar. A week later, QatarEnergy also secured a deal with Germany to provide up to 2 million tonnes of LNG per year for at least 15 years starting in 2026 from both the North Field East and the North Field South Expansion projects.

A few months after securing their agreement, in April 2023 QatarEnergy announced that Sinopec was also buying a 1.25% stake in the North Field East Expansion project, corresponding to a 5% shareholding in equivalent of one 8-mtpa train.

In May 2023, a joint venture led by Technip Energies in partnership with Consolidated Contractors Company was awarded a US$10 billion EPC contract for the North Field South Expansion project to build two trains. A few weeks later, QatarEnergy signed a 15-year agreement with Petrobangla for the supply of 1.8 million tonnes of LNG per year from the North Field Expansion project.

Shortly after, in June 2023, QatarEnergy and CNPC (China National Petroleum Corporation) signed a 27-year agreement for the delivery of 4 million tonnes of LNG per year. The two companies also announced that CNPC would be taking a 1.25% equity stake in the North Field East Expansion project.

In October 2023, QatarEnergy held a ground breaking ceremony announcing the start of construction on the project.

Financing

Bloomberg reported in April 2021 that QatarEnergy was planning a major bond issue, potentially as early as the second quarter of 2021, to bring in between US$7 billion and US$10 billion to finance the North Field LNG Terminal. An unnamed source suggested that QatarEnergy had invited banks to arrange what would be its first dollar denominated bonds.

In June 2021, Reuters reported that QatarEnergy has hired Citi and JPMorgan Chase to coordinate the bond issue, with Bank of America, Deutsche Bank, Goldman Sachs, HSBC, MUFG, QNB Capital and Credit Suisse also participating in the fundraising. QatarEnergy's turning to the international bond markets is attributed to Middle East energy companies having to raise capital via alternative means following the detrimental financial impacts of the COVID-19 pandemic and oil prices collapsing in 2020. It was confirmed at the end of June that the banks helped QatarEnergy raise US$12.5 billion in the biggest bond issue in an emerging markets country so far in 2021. QatarEnergy's bonds' prospectus said that the capital raised will be used for general operational and investment purposes, including for the North Field expansion project.