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ConocoPhillips said the instability of global gas markets could last for years as it joins other Western energy companies by investing in a $ 29 billion project to increase fuel exports from Qatar.
The Houston-based company will buy a 3.1% stake in the North Field East project. CEO Ryan Lance announced the deal with Qatar’s Energy Minister Saad al-Kaabi in Doha on Monday.
The Italian Eni SpA and TotalEnergies SE from France were previously announced as investors in the project with shares of 3.1% and 6.3%, respectively. Shell Plc and Exxon Mobil Corp. were among the companies submitting bids. The state-controlled company Qatar Energy, of which al-Kaabi is also chief executive, is scheduled to announce another deal on Tuesday.
The enlargement will increase Qatar’s annual liquefied natural gas capacity to 110 million tonnes from 77 million, just as demand is growing worldwide, especially in Europe. After Moscow’s invasion of Ukraine, buyers rushed to secure non-Russian supplies. Gazprom PJSC last week reduced gas flows through pipelines, highlighting the continent’s vulnerability and raising the spectrum of fuel rationing. Prices in Europe have jumped.
“None of us know how long this will last,” Lance said, referring to large fluctuations in gas prices. “We have to be prepared for this for months and even years.
Al-Kaabi said high gas prices were hitting demand and forcing some consumers to switch to the dirtier coal fossil fuel, which he described as “really worrying”.
“As producers, we like healthy prices,” al-Kaabi said. “But prices that are too high are destructive to demand. You don’t want a spoiled customer. This is causing great economic slowdown around the world. Energy bills are getting so big and slowing down economies around the world.
Qatar Energy expects North Field East to start operating in early 2026, which means that European buyers will have to look for alternative supplies in the meantime.
As additional gas begins to flow, Qatar expects to send more shipments to Europe. About 80% of Qatar’s liquefied natural gas is currently destined for Asia, but the share delivered to Europe will increase to 40% -50%, according to al-Kaabi.
Qatar’s higher production will help the Gulf country maintain its position as one of the world’s largest suppliers. North Field East will increase its liquefied natural gas production capacity in Qatar for the first time since 2011. However, Qatar will still be the second largest exporter of liquefied natural gas in 2028 after the United States, according to BloombergNEF.
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