France's TotalEnergies invests another $1.5 bn to expand Qatar gas production

France ASSOCIATED PRESS - Anonymous
SEP 24, 2022 LISTEN

TotalEnergies has signed a further $1.5 billion investment in the world's largest natural gas field – "perfect timing" says CEO Patrick Pouyanne as Europe searches for new energy sources to replace Russian supplies.

Qatar Energy Minister Saad Sherida Al-Kaabi announced the deal with TotalEnergies chief executive Patrick Pouyanne on Saturday.

TotalEnergies will have 9.3 percent of the North Field South project, Kaabi said, for which 25 percent will be reserved for foreign energy firms.

"Qatar Energy announces the selection of TotalEnergies as a partner for the development of the North Field South," Qatar's official news agency QNA said. "New partners will be announced at a later stage."

Kaabi said that the French giant would also help to finance the extraction of gas from North Field South and it would take on an "enhanced strategic" role in Qatar's gas expansion.

In June, TotalEnergies agreed a $2 billion deal to take part in the giant North Field East project, that will help Qatar increase its liquefied natural gas (LNG) production by more than 60 percent by 2027.

'Perfect timing'

LNG from North Field is expected to start coming on line in 2026.

Since Russia cut oil and gas supplies to much of Europe, European nations have been scrambling to find alternatives.

Pouyanne, who said Saturday the latest deal would require another $1.5 billion, said his firm would have taken an even biger chunk of the production if it was possible.

"We need new capacity for sure, and this will be coming at perfect timing," he told reporters.

More companies will be announced for the North Field South in coming weeks, officials said, but TotalEnergies will have the largest foreign slice.

Qatar is already one of the world's top LNG producers, alongside the United States and Australia.

State-owned Qatar Energy estimates that North Field holds about 10 percent of the world's known natural gas reserves.

The reserves extend under the sea into Iranian territory, where Tehran's efforts to exploit its South Pars gas field have been hindered by international sanctions.

South Korea, Japan and China have become the main markets for Qatar's LNG but since an energy crisis hit Europe last year, the Gulf state has helped Britain with extra supplies and also announced a cooperation deal with Germany.

(with newswires)