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April 21, 2022

Qatar Energy considers expanding LNG capacity amid rising gas demand

Qatar Energy is in talks with undisclosed gas buyers on whether to add six gas-liquefaction plants to expand the $30bn project.

State-run Qatar Energy is considering further expanding its liquefied natural gas (LNG) capacity amid the rising gas demand in Europe, reported Bloomberg News, citing people familiar with the matter.

The European nations are attempting to secure supplies to cut reliance on Russian gas, following the invasion of Ukraine.

Qatar Energy is in talks with undisclosed gas buyers on whether to expand the $30bn project by adding six gas-liquefaction plants.

Each of the proposed six new units is expected to have the capacity to produce eight million tonnes of LNG per year.

As part of this expansion plan, Qatar Energy is assessing the cost of developing at least one more unit at the project and the interest from customers, including some in China, for additional gas.

Qatar Energy, however, would stick with its existing plan as deliberations are at an early stage, the report said.

The company aims to increase its annual output by 60%, to almost 130 million tonnes, by 2027.

In a separate announcement, Iraq is planning to sign a deal in May 2022 to import LNG from Qatar in a bid to diversify its sources of supply, Bloomberg News has reported.

Iraqi Electricity Minister Adel Kareem was cited by the publication as saying, in an interview, that the LNG purchase from Qatar is expected to help Iraq in replacing some of the gas currently piped from Iran.

Kareem noted that Iran could not meet the gas needs of Iraq due to its own domestic demand.

“The prices are high but we have no options. We need energy. We need the Qatari gas to fill in the shortage in the Iranian gas supplies,” Kareem added.

Last month, QatarEnergy announced that it had agreed to purchase a 40% stake in an exploration block, offshore Egypt, from ExxonMobil.

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