Qatar will further raise gas production despite a steep drop in global gas prices, pushing ahead with plans to extract more of the resource amidst fierce competition with rivals such as the United States.
QatarEnergy chief Saad al-Kaabi announced on Sunday a new expansion of its liquefied natural gas production that will add a further 16 million tonnes per annum (mtpa) to existing expansion plans, bringing total capacity to 142 mtpa.
The Qatari announcement comes as US gas prices trade near an all-time low if adjusted to inflation after a decade of meteoric rises in output which made the US one of the top oil and gas exporters.
Prices of gas in Europe also fell steeply despite a drop in Russian supplies after the US and Qatar helped replace lost volumes.
Kaabi said gas markets in Asia would continue to grow and Europe would still need more gas for the foreseeable future.
“We still think there’s a big future for gas for at least 50 years forward and whenever we can technically do more, we’ll do more,” he said at a press conference to announce the expansion in Doha.
“We see that Europe is going to need gas for a very, very long time. But the growth in Asia is definitely going to be bigger than the growth in Europe, basically driven by population growth.”
With this added boost, the overall expansion of the North Field from 77 mtpa currently to 142 mtpa by 2030 represents an increase of 85 per cent in production.
Qatar is among the world’s top exporters of LNG, competition for which had ramped up since the beginning of the war in Ukraine in February 2022.
Despite the price drop all major gas producers including the US, Australia and Russia want to further increase output betting on further demand growth and worries that their gas might not be needed decades from now if energy transition makes green energy cheaper.
This latest expansion may not be the last for the Gulf energy giant as Kaabi said appraisal of Qatari gas reservoirs would continue and production would be further expanded if there is a market need.
State-owned QatarEnergy has already signed a string of supply deals with European and Asian partners in its massive North Field expansion project, which was expected — prior to Sunday’s announcement — to begin producing 126 million mtpa of LNG per annum by 2027, from the current 77 mtpa.—AGENCIES
