Sep 23 | 2021
Need for Predictable Investment in Global Supply Chain
By Malcolm Ramsay
As Qatar pushes forward with plans to significantly expand its massive North Field development, the scope for breakbulk activity in the emirate is expected to increase over the next five years.
Most recently, Qatar Petroleum awarded Spanish firm Técnicas Reunidas a major engineering, procurement, and construction, or EPC, contract for the North Field Expansion Project, as part of plans to bring 64 million tonnes of LNG coming to the market between 2025-2027.
"There is a huge demand from all our customers, and unfortunately we cannot cater for everybody. Unfortunately, in my view, this is due to the market not investing enough in the industry," said Saad al-Kaabi, Qatar’s energy minister and CEO of Qatar Petroleum, said, speaking at the Gastech conference in Dubai.
Gas Price Pressure
While investment in the sprawling North Field Expansion Project was first announced in 2017, pressure to ramp up production has grown this year, as a global gas crisis has seen prices skyrocketing.
Speaking at the sidelines of Gastech, al-Kaabi called for global investment in gas and LNG projects to counter the current these high prices, stating “We don’t think it is good for the consumers We don’t want US$2 and we don’t want US$20, we want to have a reasonable price that is sustainable.”
The construction phase of the North Field Expansion will require major project cargo logistics for four mega LNG trains with a capacity of 8 million tonnes per annum (mtpa) each, making it one of the largest LNG capacity additions ever made and one of the largest investments in the energy industry for the past recent years.
Global gas prices have tripled in the first three quarters of this year, sending shockwaves through markets and raising prices for numerous inter-related sectors, with volatility compounded by hesitancy from investors in the wake of the covid pandemic.
OPEC Secretary-General Mohammad Barkindo, also speaking at Gastech, called for “predictable investment in the oil and gas sector” to address increasing global energy demand, and highlighted the need to construct new infrastructure to allow hydrocarbon fuels to continue “to supply more than half the world’s energy needs in 2045, with oil at 28 percent; natural gas at 24 percent.”
Ras Laffan Growth
Under the terms of the EPC deal, Técnicas Reunidas will oversee breakbulk transport for a vast range of construction, including: new loading facilities within Ras Laffan Industrial City, expansion of import facilities for Mono-Ethylene Glycol and creation of storage facilities for existing liquid products, such as condensate, propane and butane.
“The initial scope of the project, to be executed over 41 months,” a spokesperson for Técnicas Reunidas commented, “ it is for the completion of an “EPC- 3 package” required for the expansion of liquid products storage and loading that are by-products of the LNG liquefaction process.”
Valued at more than US$500 million, the EPC contract will also cover construction of ancillary facilities and pipelines serving the North Field Expansion Project and includes options that may "substantially increase the total amount" according to Tecnicas Reunidas.
The project will support the first phase of expansion, known as North Field East (NFE), as well as laying the groundwork for the second phase, dubbed North Field South (NFS). The EPC award follows the completion of front-end engineering and design (FEED) work that began in early 2018.
Headquartered in Madrid, Técnicas Reunidas employs a workforce of more than 7,500 in 25 countries and has completed engineering projects at more than 1,000 industrial plants over its 60 years of experience.
New Investments Expected
Located offshore from the northeast Qatar peninsula, North Field is the world’s biggest single non-associated natural gas field. The first phase NFE project is set to increase Qatar’s LNG production capacity from 77 mtpa to 110 mtpa, while the NFS will further increase this to 126 mtpa.
Qatar Petroleum has already committed to invest at least US$28.75 billion in the North Field Expansion and has signaled that it expects this figure to rise further. The firm said it will select all partners for first phase by early next year and reach a final investment decision on the second phase in the first quarter of 2022
The firm expects to start production from NFE in the fourth quarter of 2025. Alongside LNG, the project will produce condensate, LPG, ethane, sulfur and helium, delivering about 1.4 million barrels oil equivalent per day.
“There’s a euphoria around the energy transition that’s forcing companies not to invest,” Al-Kaabi added.“People should not forget that new investments are needed to just keep output sustained. People are now realizing there’s a supply crunch and we haven’t even got into the winter season yet.”
The world's third-largest oil company oil and gas reserves, Qatar Petroleum is wholly owned by the state of Qatar and is responsible for shaping much of the government’s energy policy. Should teh company succeed in its overarching plan to bring the 64 million tonnes of additional capacity online by 2027 it is expected to account for around 15 percent of current global production.
As Qatar pushes forward with plans to significantly expand its massive North Field development, the scope for breakbulk activity in the emirate is expected to increase over the next five years.
Most recently, Qatar Petroleum awarded Spanish firm Técnicas Reunidas a major engineering, procurement, and construction, or EPC, contract for the North Field Expansion Project, as part of plans to bring 64 million tonnes of LNG coming to the market between 2025-2027.
"There is a huge demand from all our customers, and unfortunately we cannot cater for everybody. Unfortunately, in my view, this is due to the market not investing enough in the industry," said Saad al-Kaabi, Qatar’s energy minister and CEO of Qatar Petroleum, said, speaking at the Gastech conference in Dubai.
Gas Price Pressure
While investment in the sprawling North Field Expansion Project was first announced in 2017, pressure to ramp up production has grown this year, as a global gas crisis has seen prices skyrocketing.
Speaking at the sidelines of Gastech, al-Kaabi called for global investment in gas and LNG projects to counter the current these high prices, stating “We don’t think it is good for the consumers We don’t want US$2 and we don’t want US$20, we want to have a reasonable price that is sustainable.”
The construction phase of the North Field Expansion will require major project cargo logistics for four mega LNG trains with a capacity of 8 million tonnes per annum (mtpa) each, making it one of the largest LNG capacity additions ever made and one of the largest investments in the energy industry for the past recent years.
Global gas prices have tripled in the first three quarters of this year, sending shockwaves through markets and raising prices for numerous inter-related sectors, with volatility compounded by hesitancy from investors in the wake of the covid pandemic.
OPEC Secretary-General Mohammad Barkindo, also speaking at Gastech, called for “predictable investment in the oil and gas sector” to address increasing global energy demand, and highlighted the need to construct new infrastructure to allow hydrocarbon fuels to continue “to supply more than half the world’s energy needs in 2045, with oil at 28 percent; natural gas at 24 percent.”
Ras Laffan Growth
Under the terms of the EPC deal, Técnicas Reunidas will oversee breakbulk transport for a vast range of construction, including: new loading facilities within Ras Laffan Industrial City, expansion of import facilities for Mono-Ethylene Glycol and creation of storage facilities for existing liquid products, such as condensate, propane and butane.
“The initial scope of the project, to be executed over 41 months,” a spokesperson for Técnicas Reunidas commented, “ it is for the completion of an “EPC- 3 package” required for the expansion of liquid products storage and loading that are by-products of the LNG liquefaction process.”
Valued at more than US$500 million, the EPC contract will also cover construction of ancillary facilities and pipelines serving the North Field Expansion Project and includes options that may "substantially increase the total amount" according to Tecnicas Reunidas.
The project will support the first phase of expansion, known as North Field East (NFE), as well as laying the groundwork for the second phase, dubbed North Field South (NFS). The EPC award follows the completion of front-end engineering and design (FEED) work that began in early 2018.
Headquartered in Madrid, Técnicas Reunidas employs a workforce of more than 7,500 in 25 countries and has completed engineering projects at more than 1,000 industrial plants over its 60 years of experience.
New Investments Expected
Located offshore from the northeast Qatar peninsula, North Field is the world’s biggest single non-associated natural gas field. The first phase NFE project is set to increase Qatar’s LNG production capacity from 77 mtpa to 110 mtpa, while the NFS will further increase this to 126 mtpa.
Qatar Petroleum has already committed to invest at least US$28.75 billion in the North Field Expansion and has signaled that it expects this figure to rise further. The firm said it will select all partners for first phase by early next year and reach a final investment decision on the second phase in the first quarter of 2022
The firm expects to start production from NFE in the fourth quarter of 2025. Alongside LNG, the project will produce condensate, LPG, ethane, sulfur and helium, delivering about 1.4 million barrels oil equivalent per day.
“There’s a euphoria around the energy transition that’s forcing companies not to invest,” Al-Kaabi added.“People should not forget that new investments are needed to just keep output sustained. People are now realizing there’s a supply crunch and we haven’t even got into the winter season yet.”
The world's third-largest oil company oil and gas reserves, Qatar Petroleum is wholly owned by the state of Qatar and is responsible for shaping much of the government’s energy policy. Should teh company succeed in its overarching plan to bring the 64 million tonnes of additional capacity online by 2027 it is expected to account for around 15 percent of current global production.
