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- State’s energy minister claims expansion project viable even if oil falls to $20 a barrel
RIYADH: Qatar aims to be the world’s biggest producer of liquefied natural gas (LNG) for at least the next two decades, capitalizing on rising demand as the world transitions from oil and coal to cleaner energy, according to Asharq Bloomberg.
Qatar will spend billions of dollars expanding its LNG capacity more than 50 percent to 126 million tons a year, a level other countries would struggle to match, Energy Minister Saad Al-Kaabi told Bloomberg Television.
The Gulf state is already the world’s main supplier of the super-chilled fuel, but new projects elsewhere, especially in Australia and the US, have eroded its dominance.
The nation would be able to produce LNG from the first phase of the expansion so cheaply that it would be viable even if oil prices fell below $20 a barrel, said Al-Kaabi. “This is one of the most competitive, if not the most competitive, projects on the planet,” he added.
Oil prices collapsed last year but have soared more than 60 percent since the start of November to around $64 a barrel with the roll-out of coronavirus disease (COVID-19) vaccines.
State producer Qatar Petroleum (QP) took a final investment decision on the North Field East Project last week. The project is likely to be the only one in the world to pass this milestone in 2021, after just one was sanctioned to move ahead last year, according to Bloomberg NEF.
Al-Kaabi, who is also chief executive officer of QP, said that the lack of new supply from other countries would benefit Qatar. “With less projects coming online, our expansion is very timely,” he added.
Qatar last year supplied 23 percent of the world’s LNG and energy companies looking to produce more renewable energy will still need gas to offset the intermittency of green power, said Al-Kaabi.
“Renewables will definitely happen, we’re doing a lot ourselves, but you need gas to complement that. Gas is sort of in a Catholic marriage with renewables. They would need to stay together for a very long time for you to have the transition successfully,” the minister added.
Qatar is one of world’s richest countries, with a per capita gross domestic product of $53,000 last year, according to the International Monetary Fund.
QP has booked capacity at units that turn LNG back into gas in Belgium, France, and the UK. It is also looking to build on its 70 percent stake in Britain’s largest LNG import terminal by investing in more regasification plants, said Al-Kaabi.