Qatar Petroleum commits to low-carbon LNG in latest expansion

Qatar Petroleum (QP) announced 8 February it reached a final investment decision (FID) on the four-train first phase of its planned Qatargas expansion, dubbed the North Field East Project (NFE). The project will feature carbon capture and storage (CCS) technology that QP and its partners said will reduce carbon emissions from natural gas liquefaction and storage by about 25% below comparable operations around the world.

Estimated to cost $28.7 billion, NFE will involve the construction of four LNG trains, each with a capacity of 8 million metric tons per annum (MMtpa), which IHS Markit says is the largest single FID ever for a liquefaction facility.

Upon completion, expected at the end of 2025, the project would expand Qatar's LNG production capacity to approximately 110 MMtpa, up from current capacity of about 79 MMtpa, said QP Chief Executive Officer Saad Sherida al-Kaabi at a signing ceremony. At this event, al-Kaabi formally awarded the project's key onshore engineering, procurement and construction (EPC) contract to Chiyoda Corporation and Technip Energies.

"One of the most important environmental elements of the NFE project is its [carbon dioxide (CO2)] capture and sequestration system that will be integrated with our wider CCS scheme in Ras Laffan, which—once fully operational—will be the largest of its kind in terms of capacity in the LNG industry, and will be one of the largest ever developed anywhere in the world," al-Kaabi said.

Equipping the expanded operations with CCS builds on the "sustainability pledge" that QP made in January for its upstream and downstream operations. "Qatar is the world's largest LNG producer, and by implementing our sustainability strategy, we will play a decisive role in helping reduce the impact of climate change by implementing measures to curb emissions, produce LNG using the latest proven carbon reduction technologies, and compensating for residual emissions where necessary," al-Kaabi said at that time.

QP's expanded LNG capacity could be significant for an industry which IHS Markit estimates had global production of about 350-360 MMtpa in both 2019 and 2020.

More growth could be coming, al-Kaabi added, as the North Field South Project is still being reviewed. At the press conference, he said that if that expansion is approved, it could boost the nation's LNG production capacity to 126 MMtpa.

Low-carbon LNG

The issue of LNG's emissions trail has gained prominence in the last year, particularly in Europe, which is a major destination for Qatar's LNG.

In October 2020, the European Commission announced its Methane Strategy, which asserts that non-EU imported pipeline natural gas and LNG contribute three to eight times the emissions of those products when they are produced inside the EU. The EC Methane Strategy raises emissions reporting requirements for exporters to EU nations and allows the setting of "default values" for methane emissions if reporting standards are not met (see IHS Markit coverage here).

QP seems ready to step up its emissions reporting as well. An LNG supply deal it signed in December 2020 with Singapore-based Pavilion Energy Trading & Supply Pte Ltd. to provide 1.8 MMtpa for 10 years beginning in 2023 includes certificates that will identify the level of emissions associated with each cargo. It does not commit QP to a particular level of emissions, al-Kaadi said at the time, but he called it "our first long-term LNG arrangement containing specific environmental criteria and requirements designed to ultimately reduce the carbon footprint of the LNG supplies."

In addition to the CCS installation, QP has identified other NFE project elements that will reduce greenhouse gas (GHG) emissions and its overall environmental impact:

• A significant portion of the project's electrical power needs will be provided from Qatar's national power grid, which is installing solar photovoltaic facilities at a rapid rate. QP is in the process of procuring power from a 800 megawatt (MW) solar plant currently under construction in Al-Kharsaah, in addition to a further 800 MW of solar power which QP will construct in the near future. Overall, QP's sustainability plan aims for a domestic solar power portfolio of more than 4,000 MW by 2030.
• The LNG facility will incorporate a jetty boil-off gas recovery system, which will help reduce GHG emissions by approximately a further 1 MMtpa of CO2-equivalent.
• The project will include a system to recover 75% of the plant's tertiary water, thus conserving 10.7 million cubic meters of water per year.

Posted 11 February 2021 by Kevin Adler, Editor, Climate & Sustainability Group, IHS Markit