Shell Plc is set to follow other Western energy majors in taking a stake in a $29 billion project to boost Qatar’s liquefied natural gas exports as Europe races to shore up new supplies in fuel.
The London-based company is likely to announce its partnership with state-owned Qatar Energy in Doha on Tuesday, according to two people familiar with the matter.
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Shell CEO Ben van Beurden is expected to attend the signing ceremony with Qatari Energy Minister Saad al-Kaabi, who is also CEO of QE, one of the people said.
A Shell spokesperson declined to comment, while QE did not immediately respond to a request for comment.
Qatar is increasing its production capacity in the context of a global energy crisis. LNG demand is skyrocketing as European countries try to wean themselves off Russian gas after Moscow’s attack on Ukraine.
In Singapore on Wednesday, Van Beurden told reporters to ask al-Kaabi about the timeline for a possible deal with Qatar Energy. The company previously confirmed its bid for a stake in the North Field East project, which will take Qatar’s peak LNG production to 110 million tonnes by 2026 from 77 million.
The world is heading for “turbulent times, with gas and oil supplies tightening as more and more governments ease coronavirus restrictions,” Van Beurden said in Singapore.
“Available capacity is very low, demand continues to recover,” he said. “So with that, along with the uncertainties associated with the war in Ukraine and the sanctions that could come with it, there’s a good chance we’ll be facing a turbulent time.”
It is unclear how much Shell will invest in North Field East. Exxon Mobil Corp. and TotalEnergies SE will each hold 6.25%, while ConocoPhillips and Eni SpA will get half of this stake.
Qatar is one of the few countries that can significantly replace Russia’s energy supply in Europe, but not before its extra gas starts flowing.
It plans a second phase of expansion called North Field South. This will increase its capacity to 126 million tonnes per year by 2027. Many of the partners in this project will be the same as those of North Field East, the Qatari government has said.
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