North Field expansion enters key phase with entry of first value added partner

The multi-billion dollar North Field expansion has entered a new phase with value added partners (VAPs) joining the project, beginning with China National Petroleum Corporation (CNPC).
On June 20, QatarEnergy signed definitive agreements with China National Petroleum Corporation, covering the supply of 4mn tonnes of LNG annually for 27 years and a 5% stake for CNPC in the North Field East LNG expansion project (NFE).
The two energy majors signed an LNG sales and purchase agreement (SPA) for the delivery of 4mn tonnes of LNG per year from the NFE project to CNPC’s receiving terminals in China over a span of 27 years, marking the industry’s longest term SPA commitment.
The two parties also signed a share sale and purchase agreement pursuant to which QatarEnergy will transfer to CNPC a 5% interest in the equivalent of one NFE train with a capacity of 8mn tonnes per year.
This transfer will see CNPC become a partner (value added) in the NFE project and will not affect the participating interests of any of the other shareholders in the project.
The North Field expansion comprises North Field South (NFS) and North Field East (NFE) will increase Qatar’s LNG production capacity from the current 77 MTPY to 126 MTPY.
Speaking to Gulf Times at a media event held on the sidelines of the event at QatarEnergy, HE the Minister of State for Energy Affairs, Saad bin Sherida al-Kaabi said, “Our project provides lucrative returns in the industry. So the returns are very high.”
He said, “The way we have structured the project is that 75% in each venture will be with us - QatarEnergy - and the remaining 25% tendered out to competition for international oil companies (IOCs).
“Of the 75% stake we have, 5% is potentially for value added partners. We will only give up 5% of our stake in the project if someone actually secures a long-term market. And add value to the project, long-term. Today’s agreement shows that value addition through CNPC,” al-Kaabi told Gulf Times.
He said many Asian countries are in talks with QatarEnergy to take an equity stake in Qatar’s North Field expansion project.
“There is a hot competition to associate with the prestigious North Field expansion project. We expect to have a few more VAPs in our project.”
Al-Kaabi also said China is now Qatar's top buyer of liquefied natural gas.
"China is the largest consumer of LNG from Qatar by far...China is our number one customer. China is also the world's biggest buyer of liquefied natural gas."
Al-Kaabi said, “Last year, Qatar sold 15mn tonnes of LNG to China. China is also a huge market for LPG, helium and condensates, of which Qatar is the world's top producer.”