Despite a sharp decline in the price of petrol globally, Qatar is going to increase its production of the resource, forging ahead with plans to extract more in the face of intense rivalry from rivals like the US.
The head of QatarEnergy, Saad al-Kaabi, revealed on Sunday that the company is going to increase the production of liquefied natural gas by an additional 16 million tonnes per year (mtpa) on top of the current development plans. This would increase the overall capacity to 142 mtpa.
The declaration from Qatar coincides with US petrol prices that, when adjusted for inflation, are almost at an all-time low. This is in contrast to the US being one of the leading exporters of petrol and oil after ten years of explosive output increases.
Despite a decrease in Russian supplies, petrol prices in Europe also dropped sharply when the US and Qatar assisted in making up for lost volumes.
According to Kaabi, Europe would require more petrol for the foreseeable future, while petrol markets in Asia would keep expanding.
At a press conference to announce the expansion in Doha, he stated, "We still think there's a big future for gas for at least 50 years forward and whenever we can technically do more, we'll do more."
It is evident that Europe will require petrol for an extended period of time. However, due primarily to population increase, Asia's growth will undoubtedly surpass that of Europe.
With this additional boost, the North Field's total growth from 77 mtpa to 142 mtpa by 2030 represents an 85% increase in production.
Since the start of the conflict in Ukraine in February 2022, competition for LNG exports has intensified, and Qatar is one of the major exporters of the gas worldwide.
All major gas producers, including the US, Australia, and Russia, want to boost output despite the price decline because they anticipate additional rise in demand and fear that their gas may not be needed in decades if energy transition lowers the cost of green energy.
The Gulf energy giant's most recent expansion might not be the last, as Kaabi stated that production would increase further if the market demanded it and that assessments of Qatar's gas reserves will continue.
Two additional trains
In its enormous North Field development project, state-owned QatarEnergy has already inked a number of supply agreements with European and Asian partners. Prior to Sunday's announcement, it was anticipated that the project will increase LNG production from the current 77 million mtpa to 126 million mtpa by 2027.
The decision to expand further was driven by the company's exploration efforts to the west of North Field.
Kaabi stated the project will cost billions of dollars, but he did not specify how much.
"It is challenging to provide you with an exact figure at this time, but the expansion will undoubtedly cost billions of dollars," he remarked.
"We will begin the project's basic engineering investigations, and after the project is settled, we will reveal the exact cost at the appropriate time.”
Kaabi disclosed to Reuters in December that QatarEnergy has been conducting well drillings to evaluate prospects for growth outside of the North Field East and North Field South stages.
Two LNG trains must be built in addition to the six that are already under construction for the previous expansions in order to complete this most recent extension.
Regarding the new trains, Kaabi stated that QatarEnergy will move forward with the technical phase of the project independently without looking for partners, and that a decision on partnerships will be made at a later time.
The North Field is a portion of the largest gas field in the world, which is shared by Iran and Qatar and is known as South Pars.
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