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Tuesday, July 27, 2021

Top energy firms bid for stake in Qatar’s LNG projects

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Six global energy giants are bidding to partner in Qatar’s liquefied natural gas output expansion projects.

Six Western energy giants have placed bids to partner in Qatar’s liquefied natural gas output expansion projects, according to industry sources.

This has propelled Qatar as a leading LNG producer while several large projects around the world have stagnated.

Exxon Mobil, Royal Dutch Shell, TotalEnergies and ConocoPhillips, Chevron and Italy’s Eni submitted bids on May 24 for the expansion project, according to Reuters.

The bids show energy giants are still keen to invest in competitive oil and gas projects despite growing pressure on the field to tackle environmental risks such as greenhouse gas emissions and global warming.

State-owned Qatar Petroleum has ramped up efforts to solidify its position as a leading LNG supplier as the Gulf state gears up to return as the largest LNG producer by 2030.

In March, the state owned corporation signed a $1.9 billion LNG deal with Samsung C&T Corporation as part of Qatar’s $28.7 billion North Field Expansion project, the world’s largest LNG project.

Read also: Global oilfield contractor Schlumberger names Qatar as ‘top regional growth market’

The project is set to raise Qatar’s LNG production capacity from 77 million metric tons per year to 110 million metric tons per year by 2025.

Qatar is seeking to partner with oil giants to share the financial risk of the development and help sell additional volumes of LNG expected to be produced as part of the project.

“I don’t think QP need the IOCs expertise in the upstream or midstream construction of the project but they will be glad to see someone take some LNG volumes off their hands,” said a senior source in one of the bidding companies.

The interest from energy companies in Qatari expansion projects comes despite relatively low returns.

QP has offered international bidders returns of around 8% to 10% on their investment, down from around 15% to 20% returns seen by Exxon, Total, Shell and Conoco from early LNG facilities.

QP also plans to issue around $10 billion of bonds during this quarter to fund the Gulf state’s ambitious North Field expansionBloomberg reported.

According to the report, the state-owned petroleum company is aiming to issue 5, 10 and 30-year bond notes at an amount ranging from $7 billion to $10 billion. The report added this would also be Qatar Petroleum’s first dollar bonds.


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