France’s TotalEnergies on Saturday signed a further $1.5 billion investment in Qatar’s natural gas production expansion, which comes as Europe scrambles to find new energy sources to replace Russian supplies.
The French energy giant will have 9.3 per cent stake in the North Field South gas project, the first foreign partner in that section of the vast field, Qatar Energy Minister Saad Sherida Al-Kaabi announced, at a news conference alongside TotalEnergies chief executive Patrick Pouyanne.
“Qatar Energy announces the selection of TotalEnergies as a partner for the development of the North Field South,” Qatar’s official news agency QNA said. “New partners will be announced at a later stage.”
Kaabi said TotalEnergies would also help to finance the extraction of gas from North Field South, for which 25 percent would be reserved for foreign energy firms.
The French firm would take on an “enhanced strategic” role in Qatar’s gas expansion, he added.
In June, TotalEnergies agreed a $2-billion deal to take part in the giant North Field East project, that will help Qatar increase its liquefied natural gas (LNG) production by more than 60 percent by 2027.
Pouyanne, who said Saturday the latest deal would require another $1.5 billion, said his firm would have taken an even bigger chunk of the production if it was possible.
“We need new capacity for sure, and this will be coming at perfect timing,” he told reporters.
“Most of the leaders of the world have discovered the words LNG,” he said, adding that European countries had to be prepared to strike more long term deals — and possibly pay a higher price to guarantee energy.
“For security of supply, there is a price,” Pouyanne said.
– Cost of security –
Kaabi, who is to meet German Chancellor Olaf Scholz on Sunday during his tour of Saudi Arabia, United Arab Emirates and Qatar, refused to discuss negotiations with European countries, but said some are “more advanced” than others.
He confirmed Qatar was also in talks with Britain.
Shell of Britain, Eni of Italy and United States giants ConocoPhillips and ExxonMobil have also signed up to be part of the North Field East project.
More companies will be announced for the North Field South in coming weeks, officials said, but TotalEnergies will have the largest foreign slice.
Qatar is already one of the world’s top LNG producers, alongside the United States and Australia, and LNG from North Field is expected to start coming online in 2026.
State-owned Qatar Energy estimates that North Field holds about 10 per cent of the world’s known natural gas reserves.
The reserves extend under the sea into Iranian territory, where Tehran’s efforts to exploit its South Pars gas field have been hindered by international sanctions.
South Korea, Japan and China have been the main markets for Qatar’s LNG.
But since an energy crisis hit Europe last year, the Gulf state has helped Britain with extra supplies, and also announced a cooperation deal with Germany.
Europe has in the past rejected the long-term deals that Qatar seeks for its energy, but a change in attitude has been forced since Russia’s invasion of Ukraine in February.
Qatar’s gas is among the cheapest to produce and has fuelled an economic boom in the tiny state, which has become one of the world’s wealthiest countries.