SHELL, QATAR LNG INVESTMENT $1.5 BLN

BLOOMBERG- Oct 23, 2022 - Shell Plc is investing about $1.5 billion in Qatar’s latest gas development, months after buying into another of the Gulf nation’s massive expansion projects.

The company will take a 9.375% stake in North Field South, which will expand Qatar’s liquefied natural gas output capacity by 16 million tons a year, Energy Minister Saad Al-Kaabi said at a signing ceremony in Doha on Sunday. He spoke alongside Shell’s chief executive officer, Ben van Beurden.

TotalEnergies SE joined the project in September, with a holding the same size as Shell’s. Qatar is selling 25% of North Field South, leaving at least one more equity partner to be announced.

The country is boosting its production and liquefaction capacity amid a global surge in demand for gas. Supplies were already tight before Russia’s invasion of Ukraine sent European nations on a frantic search for alternative sources.

The European Union has proposed capping gas prices, which van Beurden said will be 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. He added that the continent will have to reduce industrial demand for gas.

North Field South is expected to ship its first cargo in 2027, meaning it won’t ease supply crunches in the next few years. The project involves the construction of two liquefaction plants, known as trains.

Qatar is carrying out another expansion plan, North Field East, which will cost almost $30 billion and is set to send out its first shipments in 2026. Some supply agreements have already been finalized for that project, Kaabi said.

The two developments will expand Qatar’s potential LNG output to 126 million tons a year from 77 million, consolidating its position as one of the world’s main producers of the fuel.

Shell, Total, Exxon Mobil Corp., Eni SpA and ConocoPhillips were the five companies that invested in North Field East.

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