OIL MAJORS BID FOR QATAR LNG PROJECT DESPITE LOWER RETURNS

Six top Western energy firms are vying to partner in the vast expansion of Qatar’s liquefied natural gas (LNG) output, industry sources said, helping the Gulf state cement its position as the leading LNG producer while several large projects around the world recently stalled, Ron Bousso and Dmitry Zhdannikov reported Reuters.

Exxon Mobil, Royal Dutch Shell, TotalEnergies, and ConocoPhillips, which are part of Qatar's existing LNG production were joined by new entrants Chevron and Italy's Eni in submitting bids on May 24 for the expansion project, industry sources told Reuters.

The bids show energy giants continue to have an appetite for investing in competitive oil and gas projects despite growing government, investor, and activist pressure on the sector to tackle greenhouse gas (GHG) emissions.

Unlike Qatar's early LNG projects in the 1990s and 2000s when the country relied heavily on international oil companies' technical expertise and deep pockets, the country's national oil company Qatar Petroleum (QP) has gone ahead alone with the development of the nearly $30 billion North Field expansion project.

It is, however, seeking to partner with the oil majors in order to share the financial risk of the development and help sell the additional volumes of LNG it will produce.

"I don't think QP need the IOCs' expertise in the upstream or midstream construction of the project but they will be glad to see someone take some LNG volumes off their hands," a senior source in one of the bidding companies said.

Qatar plans to grow its LNG output by 40% to 110 million tonnes per annum (mtpa) by 2026, strengthening its position as the world-leading exporter of the super-chilled fuel.

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