Qatar lifts moratorium on North Dome gas field
The development in the southern section of the North Field will have a capacity of 2bn cubic feet per day, or 400,000 barrels of oil equivalent, and increase production of the field by about 10%, when it starts production in five to seven years: QP CEO
Qatar has lifted a self-imposed prohibition on development of the world's biggest natural gas field, the chief executive officer of Qatar Petroleum has said, as the world's top LNG exporter looks to see off an expected rise in competition.
Qatar declared a moratorium in 2005 on the development of the North Field, which it shares with Iran, to give Doha time to study the impact on the reservoir from a rapid rise in output.
The vast offshore gas field, which Doha calls the North Field and Iran calls South Pars, accounts for nearly all of Qatar's gas production and around 60% of its export revenue.
"We have completed most of our projects and now is a good time to lift the moratorium," QP CEO Saad al-Kaabi said during a press conference on Monday at Qatar Petroleum's headquarters in Doha. "For oil there are people who see peak demand in 2030, others in 2042, but for gas demand is always growing."
The development in the southern section of the North Field will have a capacity of 2bn cubic feet per day, or 400,000 barrels of oil equivalent, and increase production of the field by about 10%, when it starts production in five to seven years, he said.
Global business intelligence agency Wood Mackenzie told arabianoilandgas.com that it sees removal of the moratorium as a signal from Qatar about its intention to increase its market share, which has been falling as other regions have built new capacity.
‘We expect much of the gas 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,’ WoodMac said in a statement.
Qatar is expected to lose its top exporter position this year to Australia, where new production is due to come online.
The LNG market is undergoing huge changes as the biggest ever flood of new supply is hitting the market, with volumes coming mainly from the United States and Australia.
President Vladimir Putin last week said that Russia aimed to become the world's largest LNG producer.
The flurry of LNG production has resulted in global installed LNG capacity of over 300mn tonnes a year, while only around 268mn tonnes of LNG were traded in 2016, Thomson Reuters data shows.
That has helped pull down Asian spot LNG prices by more than 70% from their 2014 peaks to $5.65 per million British thermal units (mmBtu).
Qatar's decision to lift the moratorium on new gas development now could help the Gulf state maintain a competitive edge after 2020, when the global LNG market is expected to tighten.
‘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’, the WoodMac said in the statement to this website.
‘But it is also a threat to other developers of new capacity worldwide, as Qatar can add new capacity at a lower cost than anybody else. Any development of the North Field is likely to have a strong liquids component,’ it added.