Qatar announced on Saturday September 24 the signing of a major contract with the French oil and gas giant TotalEnergies for the development of the largest natural gas field in the world, against the backdrop of an energy crisis in Europe caused by the Russian war. in Ukraine.
“QatarEnergy (QE) has selected TotalEnergies as the first foreign partner for the development of the North Field South (NFS) natural gas field”said the Qatari hydrocarbon giant in a press release.
The French giant had already signed an agreement of more than 2 billion dollars with Doha in June for the development of the North Field East (NFE) project. North Field South and North Field East are expansion projects for the offshore North Field, the world’s largest natural gas field that the Gulf country shares with Iran.
“Strengthened strategic role”
This new agreement will require an investment of an additional $1.5 billion, said Patrick Pouyanné, CEO of TotalEnergies. The French giant “will have a reinforced strategic role” in gas development in Qatar, assured the Minister of Energy of Qatar. The participation of TotalEnergies will slightly exceed 9%, while Qatar has set the total share of foreign companies at 25%. Other partners should therefore join the project at a later date.
North Field accounts for approximately 10% of the world’s known natural gas reserves. While Qatar is already one of the main LNG producers in the world, along with the United States and Australia, Doha wants to increase its production by more than 60% to reach 110 million tonnes by 2027.
South Korea, Japan and China are the main customers, Europe having long opposed the long-term agreements desired by the emirate. But following the war in Ukraine, LNG importers are rushing to secure alternatives to Russian gas.
A “price” to pay
The total stoppage of Russian gas deliveries via the Nord Stream gas pipeline since September 2 has raised fears in Europe of a serious energy crisis this winter. “We definitely need new capabilities and (this investment) is timely”said the PGD of TotalEnergies on Saturday, specifying that European countries must make more long-term investments and pay a possibly higher price to secure their energy supply. “To ensure supply, there is a price (to pay)”underlined Patrick Pouyanné.
The announcement comes as German Chancellor Olaf Scholz is due to begin a Gulf tour on Saturday, where he is due to visit Saudi Arabia, the United Arab Emirates and Qatar. Doha is also in negotiations with Great Britain. In July, British energy giant Shell was chosen as the fifth and final foreign partner to develop the North Field East project, where production is due to start in 2026.