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Satyendra Pathak
Doha
Qatar’s LNG business is highly attractive for potential investors due to factors such as its low-cost resources, associated liquids and brownfield economics, the Arab Petroleum Investments Corporation (APICORP) has said in its latest
report.
According to the APICORP MENA Gas & Petrochemicals Investments Outlook 2020-2024, Qatar aims to regain and keep its title as world’s top LNG exporter.
Currently, the report said, Qatar Petroleum (QP) is the largest equity LNG holder in the world with ownership of stakes ranging from 63 percent and 70 percent in Qatargas and RasGas projects, respectively.
Qatar has been increasingly facing stiff competition in the global LNG markets that it undisputedly dominated. Over the last decade, the Australian wave of new additions totalling approximately 88 mmtpa, followed by the 2015-2019 US wave of new LNG trains spurred by the surge of associated gas from shale oil bonanza added more than 45 mmtpa of export capacity by end of 2019.In fact, the report said, Australia succeeded in briefly dethroning Qatar as the world’s top LNG exporter in 2019.
As the country faces increasingly stiff competition in the global LNG markets, the report said, the North Field Expansion (NFE) megaproject, which aims to boost the country’s LNG capacity from its current 77.8 mmtpa to 110 mmtpa by 2025 and 126 mmtpa by 2027, is a cornerstone of its drive to regain its title as the world’s top LNG exporter and keep it well into the next decade.
The final investment decision (FID) for the NFE megaproject is expected to be pushed well into 2021.
“QP anticipates making a decision on partners by the fourth quarter of 2020, though delays in the EPC tender process and depressed gas prices are expected to push the decision further. Such a circumstance would make the possibility of solely funding the full project more likely if needed,” the report said.
Self-financing the NFE would be a historic precedent as compared to QP financing legacy LNG mega trains.
“It is also worth noting that previous Qatargas and RasGas projects were able to secure financing only after securing offtake guarantees, including the long-term contracts that underpinned FID on the mega trains. Therefore, the plan to self-finance the expansion trains could remove the need to finalise marketing arrangements before reaching FID, although this would require QP and its potential partners to be willing to take on the marketing risk,” the report said.
In June 2020, the report said, QP signed various agreements with Korean shipyards worth $19.2 billion to reserve construction capacity for up to 100 new LNG carriers through 2027, the largest such order in history.
“Qatar’s shipbuilding ambition is aimed at facilitating its LNG export quest by providing shipping for QP and also ExxonMobil’s Golden Pass LNG. The vessels are expected to be completed between 2023 and 2027, with the first delivery scheduled for the first quarter of 2024,” the report said.
On the MENA region’s planned and committed investments for the period 2020 to 2024, the report features key regional developments in the regional gas and petrochemicals landscape and the dynamics shaping it over the short and
medium terms.
Compared to last year’s Gas Investment Outlook 2019-2023, committed gas investments held steady, while planned investments increased by 29 percent to reach $126 billion.
“This increase is due mainly to the strong ongoing regional drive for cleaner power generation and improved monetisation of gas as a feedstock for the industrial and petrochemicals sectors,” the report said.
Despite the global demand shock, the report said, MENA region’s committed gas investments held steady compared to last year.
“Planned investments meanwhile increased by 29 percent to reach $126 billion, owed mainly to the strong ongoing regional gas drive for cleaner power generation and improved monetisation as a feedstock for the industrial and petrochemicals sectors. Notably, as part of this increase, Qatar’s NFE project accounts for $20-22 billion of the total planned gas
investments.
The petrochemicals sector meanwhile witnessed a year-on-year increase of $4 billion in planned projects compared to last year’s outlook. By contrast, committed projects decreased by $13 billion due to the completion of several projects in 2019.
The share of government investments in committed and planned gas projects at 92 percent is higher than it is in the petrochemicals sector at 72 percent, the report said.Committed gas investments in MENA region hold steady while planned gas investments reach $126 billion, a 29 percent increase compared to last year’s outlook.
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13/10/2020
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