Qatar Petroleum adds fourth train to LNG expansion

Qatar Petroleum (QP) is adding a fourth liquefaction train to the LNG expansion project it announced in 2017. When the expansion is complete, Qatar’s LNG production capacity will be 110 million tonnes/year, a roughly 43% increase from the current 77 million tpy.

With the addition of the fourth train, the expansion will produce about 32 million tpy of LNG, 4,000 tonnes/day of ethane, 260,000 b/d of condensate, 11,000 tonnes/day of LPG, and about 20 tonnes/day of pure helium. The fourth train will be included in ongoing front-end engineering and design on Trains 1-3.

QP based the decision to add a fourth liquefaction train on positive results of recent North Field appraisals. Chiyoda Corp. is conducting FEED work for Qatar’s North Field Expansion Project. QP expects to award the engineering, procurement, construction, and installation contract for the project’s offshore wellhead jackets by yearend and begin development drilling soon.

Wood Mackenzie consultants ascribed the decision to add a fourth train to a combination of cost awareness and a desire to expand market share. Giles Farrer, research director, global gas and LNG supply at WoodMac, explained that “with worldwide activity in the oil and gas industry still low, now is a good time in the cost cycle to invest in a new project. And there are likely to be economies of scale from developing a bigger project, particularly in light of the promising appraisal results at the North Field. These economies of scale will make what is already the most competitive new LNG project worldwide even cheaper.”

Farrer also noted improved oil price and LNG demand forecasts since the expansion was initially announced. “Having already taken the decision to compete for LNG market share, Qatar is doubling down, making sure that it will be fully able to benefit from LNG market upside,” he said. “Further, one of Qatar’s major competitors for new supply development—US LNG—is currently engaged in a tariff war with China, the world’s largest growth market for LNG. Qatar could see this as an opportunity. It has recently signed a contract doubling the volumes that it will sell to PetroChina and is likely to be looking at further opportunities to supply the Chinese market.”

While remarking on Qatar’s responsiveness to the growing pace of decarbonization and partnership ambitions outside the country, Farrer cautioned that making sure the expansion is “delivered on time and on budget will be a huge undertaking.”