New partner comes aboard $28.75 billion first expansion phase of world’s biggest single non-associated gas field

While sealing a multi-year liquefied natural gas (LNG) supply deal, Qatar’s state-owned energy giant QatarEnergy has welcomed a new partner at its giant North Field East (NFE) project, which represents Phase 1 of the larger North Field expansion project.

North Field East (NFE) LNG expansion project will raise Qatar’s LNG export capacity from the current 77 mtpa to 110 mtpa; Source: QatarEnergy

After QatarEnergy revealed its vision for the North Field LNG expansion project, outlining its intention to build four trains with a capacity of 8 million tons per annum (mtpa), the original plan was enlarged in November 2019 and February 2024 with two additional 8-mtpa trains each time. The first four trains, known as the North Field East expansion project, are expected to be developed as the first phase of the North Field LNG expansion program, which also entails the North Field South (NFS) and North Field West (NFW) projects.

These projects will raise Qatar’s LNG production capacity from 77 to 142 mtpa in 2030.​ When February 2021 rolled in, the Persian Gulf state’s energy heavyweight took the final investment decision (FID) for the North Field East project and handed out a $13 billion onshore engineering, procurement, construction, and commissioning (EPCC) contract for the project to Japan’s Chiyoda and France’s Technip Energies. Based on the data at the time, the project’s cost was estimated at $28.75 billion.

The Qatari player gave a $2 billion engineering, procurement, and construction contract to Samsung C&T Corporation for the NFE project the following month. In April 2022, a joint venture (JV), consisting of Técnicas Reunidas and Wison, also secured an EPC deal with QatarEnergy. A ceremony to mark the start of construction of the North Field expansion project was held in October 2023, when Sheikh Tamim bin Hamad Al Thani, Amir of the State of Qatar, laid the foundation stone for the development of the NFE and NFS projects, encompassing six mega trains.

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While TotalEnergies (6.25%), Shell (6.25%), ExxonMobil (6.25%), ConocoPhillips (3.125%), Eni (3.125%), Sinopec (1.25%), and CNPC (1.25%) are already QatarEnergy’s partners in the North Field East expansion project, the Qatari player (72.5%) has signed a share sale and purchase agreement under which it will transfer a 5% interest in the equivalent of one NFE train with a capacity of eight mtpa to CPC Corporation, Taiwan’s state-owned petroleum, natural gas, and gasoline company.

As a result, CPC will become the firm’s latest partner in the NFE project without affecting the participating interests of other shareholders. In addition, the duo also inked a 27-year LNG sales and purchase agreement (SPA) for the delivery of 4 million tons per annum of LNG from the NFE project to CPC.

While welcoming CPC as a new partner in the NFE project, Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs, President and CEO of QatarEnergy, stated: “We look forward to further enhancing our relationship with CPC, which extends for over three decades, and to further demonstrate our unwavering commitment to our customers and partners around the world.” 

QatarEnergy and CPC sign partnership and SPA deals; Source: QatarEnergy
QatarEnergy and CPC sign partnership and SPA deals; Source: QatarEnergy

The two deals were penned by Al-Kaabi and Shun-Chin Lee, Chairman of CPC Corporation, during a special ceremony held at QatarEnergy’s headquarters in Doha and attended by senior executives from both companies.

“QatarEnergy, the world’s leading LNG player, has been playing an important role in ensuring Taiwan’s domestic gas market over the past decades. CPC’s acquired equity in the NFE project and this new LNG SPA will further strengthen the cooperative relationship between our two companies,” highlighted Lee.

The Persian Gulf state’s energy giant is pursuing its LNG fleet expansion program with vigor through the execution of shipbuilding contracts and time charter agreements for 104 conventional LNG vessels and 18 QC-Max class LNG ships, amounting to a total of 122 ultra-modern vessels, with the first new ship slated to be delivered by the end of the third quarter of 2024.

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The North Field is said to be the world’s largest single non-associated natural gas field, which lies off the northeast shore of the Qatar peninsula. As this field is shared between Iran and Qatar, the Iranian side of the field is known as South Pars. Qatar’s energy sector is poised for further growth, as confirmed by Wood Mackenzie, which outlined that Qatar and the U.S. would be the front-runners in delivering the next wave of LNG growth.

This quest for more LNG aligns with the beliefs expressed by QatarEnergy’s CEO, who is convinced that LNG will remain in demand for a very long time and that employing a balancing act between energy security, affordability, and sustainability will allow countries around the globe to propel the energy transition agenda forward.