Qatar Petroleum announced on Monday that it has made a final investment decision (FID) on the North Field East (NFE) Project, the world’s largest liquefied natural gas (LNG) project, which is forecast to raise Qatar’s LNG production capacity from 77 million tonnes per annum (Mtpa) to 110 Mtpa.
Aside from LNG, the project will produce condensate, LPG, ethane, sulfur and helium. It is anticipated to commence production in the fourth quarter of 2025 and its total production is expected to reach approximately 1.5 million barrels of oil equivalent per day.
The decision to proceed with the investment was revealed during a signing ceremony held to celebrate the execution of the project’s key onshore engineering, procurement and construction (EPC) contract.
The contract was signed by His Excellency Saad Sherida Al Kaabi, the Minister of State for Energy Affairs, the President and CEO of Qatar Petroleum, Kazushi Okawa, the Chairman of the Board and CEO of Chiyoda Corporation, and Arnaud Pieton, the President of Technip Energies, in the attendance of senior executives from Qatar Petroleum, Qatargas, Chiyoda, and Technip.
The primary scope of the EPC contract is the construction of four mega LNG trains with a capacity of 8 Mtpa each, with associated facilities for gas treatment, natural gas liquids recovery, as well as helium extraction and refining within Ras Laffan Industrial City.
Speaking at the signing ceremony, H.E. Al-Kaabi thanked executives in attendance from Chiyoda and Technip, and said: “The execution of this EPC contract marks the commencement of the construction of the North Field East LNG Project, and is a significant landmark in Qatar Petroleum’s strategic growth journey in a sustainable manner.”
“The total cost of the NFE project will be 28.75 billion dollars, making it one of the energy industry’s largest investments in the past few years, in addition to being the largest LNG capacity addition ever, and the most competitive LNG project in the world,” he said.
“This project will generate substantial revenues for the state of Qatar and will have significant benefits to all sectors of the Qatari economy during the construction phase and beyond.”
Highlighting the significance of this event in the context of the global LNG and energy industry, H.E. commented: “This event is of particular importance as it comes at a critical time when the world is still reeling from the effects of a global pandemic and related depressed economies. This investment decision is a clear demonstration of the steadfast commitment by the State of Qatar to supply the world with the clean energy it needs.”
“Today’s decision carries even more significance considering that it encompasses a number of concrete environmental investments in support of our strong commitment to achieve the highest environmental standards and to provide a credible solution in the low-carbon energy transition,” the Minister said.
“One of the most important environmental elements of the NFE project is its CO2 capture and sequestration (CCS) system that will be integrated with our wider CCS scheme in Ras Laffan, which – once fully operational – will be the largest of its kind in terms of capacity in the LNG industry, and will be one of the largest ever developed anywhere in the world.”
In addition to the CCS scheme, the NFE project will have a number of elements that provide this project with a unique positive environmental proposition. These include:
- 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 procuring the power from the 800-megawatt (MW) solar power plant currently under construction in Al-Kharsaah, in addition to a further 800 MW of solar power which Qatar Petroleum will construct in the near future as part of its plans to have a solar power portfolio of more than 4,000 MW by 2030;
- A ‘jetty boil-off gas’ recovery system, which will help reduce greenhouse gas emissions by approximately 1 Mtpa of CO2 equivalent;
- The project will conserve 10.7 million cubic metres of water per year by recovering 75 per cent of the plant’s tertiary water; and
- NOx emissions will be reduced by 40 per cent through the application of enhanced Dry Low NOx technology.
Wood Mackenzie comments on the announcement
Following the announcement, Wood Mackenzie Research Director, Giles Farrer, said it is the largest single LNG project sanctioned in history and at US$28.75 billion is likely to be the biggest project sanctioned across the global upstream business this year
“At a long-term breakeven price of just over $4 per million British thermal units, it’s right at the bottom of the global LNG cost curve, alongside Arctic Russian projects.”
“Qatar is pursuing market share. This FID is likely to put pressure on other pre-FID LNG suppliers, who may find Qatar has secured a foothold in new markets,” Mr Giles said.
“As long-term contracts to sell LNG from some of its existing projects expire and Qatar adds new capacity from North Field East and Golden Pass in the US, Qatar is going increasingly long on volume.”
“We estimate it will have over 75 Mtpa of uncontracted LNG volume to sell by 2027, around 70 per cent of its LNG portfolio. Qatar’s decision to construct a carbon capture and storage facility, as well as additional environmental investments, shows that LNG suppliers are increasingly putting focus on ways that they can mitigate their carbon emissions,” he shared.
Mr Giles said that this focus on low-cost supply and carbon emissions is proving attractive to buyers.
“Last year, QP Trading won a tender to supply Pavilion Energy with 1.8 Mtpa of LNG under a 10-year contract, with specific provisions for assessing and measuring the emissions associated with each LNG cargo delivered,” he detailed.
“The award of the EPC contract to Chiyoda and Technip is not a surprise given their historic involvement in the existing trains, but will be welcome news, particularly for Chiyoda, after some of its recent challenges building projects in the US and Indonesia.”
