Qatar has selected France's TotalEnergies as its first international partner at its North Field South (NFS) liquefied natural gas (LNG) project.
The move will help the Gulf state bolster its position as the world's biggest LNG exporter and boost production as Europe seeks alternatives to Russian gas.
TotalEnergies will obtain a 9.375 per cent stake in the project, out of a total 25 per cent available for international partners, while QatarEnergy will hold the remaining 75 per cent, the French company said on Saturday.
“QatarEnergy is moving forward, with the support of our partners, to help meet growing global demand for cleaner energy, of which LNG is the backbone for a serious and realistic energy transition,” Saad Al Kaabi, Qatar's Minister of State for Energy Affairs and president and chief executive of QatarEnergy, said in the statement.
“We are committing significant investments to lower the carbon intensity of our energy products, which constitutes a key pillar of QatarEnergy’s sustainability and energy transition strategy.”
TotalEnergies' NFS investment — worth $1.5 billion, according to Reuters — adds to the company's 25 per cent stake in North Field East, which QatarEnergies awarded in June.
Together, NFE and NFS form the North Field Expansion project, which aims to add 48 million tonnes per annum (mtpa) to Qatar’s export capacity and bring it to 126 mtpa by 2028.
North Field spans more than 6,000 square kilometres — equivalent to about half the land area of Qatar — and represents 20 per cent of the world's total gas reserves, according to QatarEnergy's website.
The natural gas has a wide variety of uses across the residential, commercial and industrial sectors, including for cooking, heating and generating electricity.
The agreement also comes as Europe is seeking alternatives to replace Russian supplies disrupted by the war in Ukraine.
“This latest addition to our portfolio marks an important step towards our low-carbon LNG growth objectives. It will also further strengthen our ability, together with Qatar, to support Europe’s energy security,” Patrick Pouyanné, chairman and chief executive of TotalEnergies.
Mr Pouyanné also said that TotalEnergies would have been willing to invest more than the 9.375 per cent stake if Qatar had offered it, according to Reuters.
“Qatar’s ambitious leadership, in further developing its natural gas resources through this expansion project, which ranks among the world's most competitive in terms of costs and low emissions, will make a major contribution to increasing LNG supply in the years to come,” he added.
TotalEnergies' combined stakes in NFE and NFS will add 3.5 mtpa of LNG production to global LNG portfolio by 2028, in line with the company’s objective to increase the share of natural gas in its sales mix to 50 per cent by 2030, it said.
NFE was launched by QatarEnergy in 2019 and is intended to increase the country's total LNG export capacity from 77 mtpa to about 110 mtpa by 2027 with the construction of four new LNG trains.
QatarEnergy similarly holds the remaining 75 per cent stake in the NFE project, which has a production capacity of 32 million tonnes per year.
The company, which was formerly known as Qatar Petroleum, is an integrated energy corporation, involved in the entire spectrum of the oil and gas value chain, from exploration to production, processing, transportation and marketing.
TotalEnergies is the world’s third-largest low-carbon LNG company, with a global market share of around 10 per cent and a global portfolio of nearly 50 mtpa by 2025, according to its statement.
It aims to increase the share of natural gas in its sales mix to 50 per cent by 2030.
Shell, Exxon, ConocoPhillips and Eni have also signed deals for stakes in the first phase NFE project.