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Qatar’s liquefaction capacity push to cost US$50 billion

Published by , Editorial Assistant
Tanks and Terminals,

Qatar’s ambition to raise its liquefaction capacity from the current 77 million tpy to 126 million tpy is likely to cost more than US$50 billion in greenfield investments in additional development of the giant North Field, according to estimates by Rystad Energy.

The first stage of the project, estimated to cost about US$35 billion, was expected to be sanctioned this year. However, Rystad Energy now estimates that it is more likely to be approved in the first half of 2021.

The expansion’s first phase includes contracts for associated onshore liquefaction and storage facilities. Tenders in play include construction of four LNG trains, utilities and offsite facilities, a helium recovery unit, non-technical buildings, warehouses, workshops, and associated facilities. The second stage of the expansion is likely to get the green light at the earliest by 2023.

Operator Qatar Petroleum is re-evaluating the commercial outlook of its North Field Expansion (NFE) project due to low gas prices before reaching out to international partners. Furthermore, the commercial bid deadline for liquefaction facilities has been extended to 2Q20.

Given the anticipated delays in formal sanctioning of the project, Rystad Energy has lowered its total forecast for capital expenditure in the Middle East, predicting about US$21.3 billion of investments will get the go-ahead in the region this year, versus the previous estimate of more than US$56 billion.

“Because of the spillover of delayed sanctions from 2019 and 2020, next year could see projects worth more than US$55 billion reach a final investment decision – if current schedules hold”, says Rystad Energy’s Senior Upstream Analyst Aditya Saraswat.

In the UAE, Rystad Energy estimates that sanctioning of new gas projects in 2020 will amount to US$12.5 billion.

In Saudi Arabia the company estimates that the sanctioning of the delayed Zuluf oil field expansion, a project targeting some 5 billion boe, will likely cost more than US$10 billion in investments and is forecast to get the green light in early 2022.

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