Qatar Petroleum (QP), has unveiled its new corporate strategy, aimed at strategic transformation and international expansion.
QP has plans to expand the North Field production, which will further boost Qatar’s leading global position by increasing its liquefied natural gas (LNG) production from 77mn tonnes to 100mn tonnes per annum.
QP President and CEO Saad Sherida al Kaabi said,”The new strategy and values come at a critical time in our expansion, and will ensure that we continue to be a global LNG leader. Therefore, we should all be willing and prepared to embrace and lead change to ensure success. We are developing a global business and also enhancing our competitive position as a global energy player, leaving our positive mark across the world.”
Qatar Gas vs NLNG
This is a major increment. Lets put this figures in perspective; in Nigeria, NLNG is producing 22 million metric tonnes per annum (MMTPA), but plans to construct a Train 7 that will increase its capacity to 30 MTPA. Presently Qatar Gas produces a whopping 55 MMTPA more than NLNG!
Qatar Gas Adopting the Saudi Strategy…
In 2005, Qatar imposed a moratorium on the development of its portion of the North Field. Qatar in effect used its dominance in the market to withhold a small share of production from long-term contracts when demand was high from major Asia Pacific markets.
In April 2017, QP had announced the lifting of moratorium on North Field, the largest non-associated natural gas field in the world, and disclosed the proposed gas project in the southern sector of the field.
Qatar`s strategy may have been in response to the loss of LNG market share to new supplies coming online, from Australia and America, those new supplies were meeting a lot of demand from China and India. With Sabine Pass having two tanks undergoing repairs, this may weaken America`s capacity. Either way reports have it that the world’s population will grow from 7.6 billion to 9.7 billion, that is an additional two billion people by 2050, the demand for energy is sure to rise.
It is possible that renewed gas development could give Doha a competitive edge after 2020, when the global LNG market is expected to tighten. Besides flooding the market with huge volumes of LNG, will put pressure on price and make it difficult for high cost producers and LNG projects to come on stream.
Qatar Gas Expansion vs NLNG Train 7
Qatar is keen on using its dominant position in the LNG market to facilitate long term LNG trade. Qatar is also willing to outcompete high-cost producers and potential projects. For NLNG Train 7 to be competitive, it will need to be cheaper, and come on stream hopefully before Qatar Gas achieves its 100 MTPA. For a long-term strategy, NLNG can consider investment in r & d to develop technology to drive down the cost of liquefaction, transportation and cost of gas production, larger tankers like the Q Max, co loading and Provision of Floating terminals for developing countries to open up new markets. Domestic supply of LNG is also a low hanging fruit, especially where demand can be effectively aggregated.
Olufola Wusu is a Commercial/Oil and Gas and I.P. Lawyer with Megathos Law Practice based in Lagos.
Olufola Wusu Esq. © 2018
Olufola Wusu is noted for his “dynamic practice” and “commercial acumen”. He is praised for his “first-rate skills” in assisting clients…