(Alliance News) - Shell PLC and QatarEnergy on Sunday announced that Shell will take a 9.375% in a huge gas field extension offshore Qatar for an undisclosed sum.
The North Field South expansion project is expected to have capacity for 16 million tonnes per year of liquefied natural gas.
The overall North Field expansion project, which also includes North Field East, is "the industry's largest ever LNG project", QatarEnergy said. Starting production in 2026, it will add more than 48 million tonnes per annum to world LNG supplies by 2027.
The project has taken on particular significance in recent months, after Russia's invasion of Ukraine restricted gas supply to Europe. QatarEnergy estimates that the North Field, which extends under the Gulf into Iranian territory, holds about 10% of the world's known gas reserves.
Back in July, Shell joined the USD29 billion North Field project, taking a 6.3% stake - also for an undisclosed sum - in North Field East. The four other international partners in North Field East are TotalEnergies SE, Eni Spa, ConocoPhillips and ExxonMobil Corp.
In North Field South, which comprises two LNG mega trains, Shell will be joined by at least two other international partners. TotalEnergies last month said it had been selected for a 9.375% participating interest as well. QatarEnergy, which will retain 75% of the project, said a third international partner will be announced "in due course", with a 6.25% stake remaining.
The agreement with Shell was signed in Doha on Sunday with Shell Chief Executive Officer Ben van Beurden and Saad Sherida Al-Kaabi, Qatar's minister of state for Energy Affairs and CEO of QatarEnergy.
"The new LNG volumes, which Qatar will bring to the market, come at a time when natural gas assumes greater importance in light of recent geopolitical turmoil, and amidst the dire need for cleaner energy to meet global environmental objectives," Al-Kaabi said.
By Tom Waite; thomaslwaite@alliancenews.com
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