Shell buys 9% stake in Qatari gas field

By Al Mayadeen English
Source: Agencies
23 Oct 2022 15:12

Shell Plc is investing in Qatar's latest liquefied natural gas project, just months after investing in another of the Gulf country's expansion plans.

Expansion project: a North Field facility offshore Qatar. (QATARGAS)

At a signing ceremony in Doha, Qatari Energy Minister Saad Al-Kaabi announced on Sunday that Shell will acquire a 9.375% stake in North Field South, which will increase Qatar's LNG output capacity by 16 million tons per year.

TotalEnergies SE also joined the project in September, with a 9.375% stake worth approximately $1.5 billion. Kaabi previously stated that Qatar was selling a combined 25% stake to four companies, with two more partners to be announced.

Qatar is increasing its production and liquefaction capacity in response to a global surge in gas demand.

Shell Chief Executive Officer Ben van Beurden commented on a temporary price cap on natural gas in Europe, saying EU politicians understand the plan is complicated.

“I’m sure this will settle in an appropriate and responsible way that will really benefit both markets and consumers in Europe,” he said.

Beurden added that Europe will have to reduce demand from industry for gas. As Germany yields on gas price caps, the EU backs energy measures.

Qatar's North Field South is forecasted to ship its first cargo in 2027, implying that it will not alleviate supply constraints in the coming years. The country is also working on another LNG project, North Field East, which will cost nearly $30 billion and will begin shipments in 2026.

According to Kaabi, some supply agreements for that project have already been completed. The two projects will increase Qatar's potential LNG output from 77 million to 126 million tons per year.

It is worth noting that North Field East was invested by Shell, Total, Exxon, Eni SpA, and ConocoPhillips.