Asian players expect to be heavily involved in North Field East in Ras Laffan, northeast Qatar, the world’s largest liquified natural gas project. State-owned Qatar Petroleum has taken the final investment decision to proceed with the US$28.75 billion project, which will increase the Persian Gulf country’s LNG production capacity to 110 million tonnes per annum from 77 mtpa.
CTJV, a joint venture between Chiyoda Corporation and French-American oil & gas technologies firm TechnipFMC, has been awarded a major engineering, procurement, construction and commissioning (EPCC) contract for the onshore facilities of the NFE.
The award will cover the delivery of four mega trains, each with a capacity of 8 mtpa of LNG, and associated utility facilities. This will include a large CO2 carbon capture and sequestration facility, leading to a more than 25% reduction of greenhouse gas emissions when compared to similar LNG facilities.
The new facilities will receive approximately 6 billion standard cubic feet per day of feed gas from the eastern sector of Qatar’s North Field, which is the largest non-associated gas field in the world. Non-associated gas reserves are developed primarily to produce natural gas, in contrast to associated gas reserves which are a by-product of crude oil drilling.
“We are extremely honoured to have been awarded by Qatar Petroleum this prestigious mega LNG project along with our long-time partner Chiyoda," says Arnaud Pieton, president of Technip Energies. "It demonstrates the continuity and the strength of our joint venture after the successful delivery of the six existing mega LNG trains.”
TechnipFMC is listed on the New York Stock Exchange and Euronext Paris. The company established its presence in Qatar as early as 1986.
Chiyoda Corporation was awarded a front-end engineering and design (FEED) contract for the onshore facilities of the NFE in March 2018.
In addition to LNG, the project will produce condensate, LPG, ethane, sulfur and helium. It is expected to start production in the fourth quarter of 2025 and its total production will reach about 1.4 million barrels of oil equivalent per day.
EPC contract
The decision to proceed with the investment was announced during a signing ceremony held on February 8 to celebrate the execution of the project’s key onshore engineering, procurement and construction (EPC) contract.
The contract was signed by Saad Sherida Al-Kaabi, the minister of state for energy affairs and president and chief executive officer of Qatar Petroleum; Kazushi Okawa, CEO of Chiyoda Corporation; and Arnaud Pieton, president of Technip Energies.
The main scope of the EPC contract is the construction of the four mega LNG trains with associated facilities for gas treatment, natural gas liquids recovery, as well as helium extraction and refining within the industrial city of Ras Laffan. The execution of the EPC contract marks the commencement of construction.
One of the most important environmental elements of the NFE project is its CO2 capture and sequestration (CCS) system that will be integrated with a wider CCS scheme in Ras Laffan, and which will be one of the largest ever developed anywhere in the world.
A significant portion of the project’s electrical power needs will be provided from Qatar’s national power grid. Qatar Petroleum is in the process of putting in place procurement contracts including from the 800MW solar power plant currently under construction in Al-Kharsaah.
An additional 800MW of solar power will be constructed by Qatar Petroleum in the near future, as part of its plans to have a solar power portfolio of more than 4,000MW by 2030.
The NFE project represents the first phase of LNG expansion in Qatar. A future second phase, referred to as the North Field South Project (NFS), is planned to further increase Qatar’s LNG production capacity to 126 MMTPA.
With an expected production start date in 2027, the NFS project involves the construction of two additional mega LNG trains (with a capacity of 8 MMTPA each) and associated offshore and onshore facilities. Qatar Petroleum is evaluating further LNG capacity expansions beyond 126 MMTPA.
Trading arm
Asia is already a major customer for LNG produced in Qatar. Last November Qatar Petroleum announced the establishment and start of operations of QP Trading as its dedicated LNG trading arm.
Wholly owned by Qatar Petroleum, Doha-based QP Trading is mandated to build a globally diversified portfolio of third-party and equity LNG. In addition, the company will manage the price risk exposure of its portfolio through physical and derivatives trading.
The announcement was accompanied by the signing of QP Trading’s first deal, with Singapore’s Pavilion Energy Trading & Supply, following a competitive process. Under the agreement, QP Trading will deliver up to 1.8 million tonnes of LNG per annum for ten years to Singapore.
Chinese and South Korean shipyards have already signed contracts to build the fleet of LNG carriers needed as Qatar dramatically expands its production.
Last June Qatar Petroleum entered into three agreements to reserve LNG ship construction capacity in South Korea to be utilized for Qatar Petroleum’s future LNG carrier fleet requirements.
Under the agreements, South Korea’s Big Three shipyards – Daewoo Shipbuilding & Marine Engineering, Hyundai Heavy Industries and Samsung Heavy Industries – have reserved a major portion of their LNG ship construction capacity for Qatar Petroleum through the year 2027.
China deals
Last April Qatar Petroleum also entered into an agreement to reserve LNG ship construction capacity in China to be utilized for its future LNG carrier fleet requirements, including the North Field expansion projects.
The agreement was signed between Qatar Petroleum and Hudong-Zhonghua Shipbuilding Group, a wholly owned subsidiary of China State Shipbuilding Corporation (CSSC). Under the agreement, a significant portion of Hudong's LNG ship construction capacity has been reserved for Qatar Petroleum through 2027.
With these agreements Qatar is positioned for the largest LNG shipbuilding programme in history, which could reach over 100 vessels valued in excess of US$2.54 billion.
Chinese demand for LNG is rising sharply as it keeps up with increasing electricity consumption and attempts to reduce the use of coal in its overall energy mix.
Last November Qatargas delivered the first cargo of LNG on a Q-Max LNG carrier to the Tianjin LNG receiving terminal in China. The Q-Max is the largest LNG vessel class in the world and has the ability to deliver 266,000 cubic metres of LNG. The cargo was loaded at Ras Laffan on October 21 and delivered 20 days later in the northern port city of Tianjin.
The Tianjin LNG Receiving Terminal is owned and operated China Petroleum & Chemical Corporation (Sinopec). The terminal has a capacity of 6 mtpa and is currently being expanded to handle up to 10.8 mtpa by 2022.
