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Qatar Lifts North Field Development Freeze, Plans to Boost Production

April 3, 2017 | Pipeline

Qatar lifted a freeze on developing the world’s biggest natural gas field after more than a decade, and announced plans on Monday to boost the country’s gas production capacity by 2 billion cubic feet per day.

Qatar, the world’s largest liquefied natural gas (LNG) exporter, declared a moratorium in 2005 on the development of the giant gas field North Field, which it shares with Iran, to give Doha time to study the impact on the reservoir from a rapid increase in output.

State energy firm Qatar Petroleum’s chief executive said a series of assessment tests for production potential of the gas field, which Doha calls the North Field and Iran calls South Pars, were successful and resulted in lifting the moratorium.

“Qatar Petroleum’s technical studies and assessment of the North Field have confirmed the potential for developing a new gas project that can be targeted for export with a capacity of about 2 billion cubic feet per day,” Qatar Petroleum’s President and CEO, Saad Sherida Al-Kaabi said in a statement.

“A project of this size will increase the current production of the North Field by about 10 per cent, which will add about 400,000 barrels per day of oil equivalent to the State of Qatar’s production.”

North Field accounts for nearly all of Qatar’s gas production and around 60 percent of its export revenue.

“This new project will further strengthen Qatar’s leading position as a major player in the global gas industry and underline the pivotal role of the country’s oil and gas industry as the mainstay of the national economy,” Al Kaabi said.

Reuters quoted Kaabi at a Doha press conference as saying the new production from the field is expected to start within 5-7 years and the area Qatar is developing is the absolute south of the north field. It is the furthest project from the Iranian border.

Iran, which suffers severe domestic gas shortages, has made a rapid increase in production from South Pars a top priority and signed a preliminary deal with France’s Total in November to develop its South Pars II project.

Total was the first Western energy company to sign a major deal with Tehran since the lifting of international sanctions.

Al Kaabi said the decision to lift the moratorium has nothing to do with Iran’s plan to develop its part of the shared gas field.

“What we are doing today is something completely new and we will in future of course… share all this with them (Iran). For us this has nothing to do with Iran’s production.”

Giles Farrer, research director, global LNG at Wood Mackenzie said the plans signal Qatar’s intention to increase market share.

“With global activity levels and costs low, now is a good time to add new capacity, even if the LNG market does presently look over supplied. By the time new capacity is commissioned, in 5-7 years time, new pre-FID LNG supply is likely to be required in the global market,” he said.

Much of the gas is expected to be targeted for export although whether that is via regional gas exports, debottlenecking its existing trains or installing new LNG trains is not clear, he added.

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