x Abu Dhabi, UAEFriday 28 July 2017

Qatar reaffirms North Field moratorium

A hold on further development of its vast North Field gas reservoir will not be lifted until at least 2013.

DOHA // Qatar's moratorium on further development of its vast North Field gas reservoir will not be lifted until at least 2013, according to a senior executive of Qatar Petroleum. The moratorium will stay in place until all the planned North Field gas projects have been brought on stream, "which is probably in 2013 or a little later," Saad al Kaabi, the government-owned petroleum company's director of oil and gas ventures, said yesterday on the sidelines of a gas industry exhibition in Doha, the Qatari capital.

As the manager of Qatar Petroleum's entire portfolio of oil and gas assets, Mr al Kaabi oversees the development plan for the North Field reservoir, including technical aspects of the moratorium. He reports directly to the chairman and managing director, Abdullah al Attiyah, who is also the Qatari deputy prime minister and energy minister. Holding an estimated 900 trillion cubic feet of reserves, the North Field, located offshore Qatar in the Gulf, is the world's biggest gas deposit.

Mr al Kaabi characterised the ban on further gas development, which Qatar's government announced in 2005, as "a technical issue" unrelated to energy prices. He said the current low prices were not affecting the speed at which Qatar was developing its gas production and export projects. Nonetheless, the government has extended the expected duration of the moratorium at least twice, on grounds that more data were needed to determine how quickly gas could be produced without damaging the reservoir. The reservoir study was originally scheduled for completion this year.

Addressing a Doha gas conference held in conjunction with the exhibition, the Emir of Qatar, Sheikh Hamad bin Khalifa, said his government was keen to follow a gas production strategy that would meet the needs of the present generation of Qataris without compromising future generations. Producing the emirate's gas reserves was becoming increasingly costly, he added. "Despite all our efforts to reduce costs, still the costs of those [gas project] stages are relatively high."

Due to its rapid development of the North Field, starting in the 1990s, Qatar is currently the world's biggest exporter of liquefied natural gas (LNG). It also exports gas by pipeline to the UAE and Oman, and has gas-to-liquids facilities that produce fuels such as petrol from natural gas. Rex Tillerson, the chief executive of ExxonMobil, commended Qatar for fostering an investment environment that encouraged international energy companies to participate in developing the emirate's energy resources. He said the world would need new supplies of gas, including LNG from Qatar's North Field, if a projected 25 per cent increase in demand for the fuel by 2030 is to be met.

Exxon is the largest foreign investor in the Gulf state, and projects due to start there make up the bulk of the company's projected global production growth this year. It has stakes in projects that are set to double Qatar's production capacity of LNG this year to 62 million tonnes. Despite the huge volume of new production capacity, Mr Tillerson said Qatar, as a low-cost producer, was well placed to adapt to an LNG market suffering as the economic downturn ate into demand.

He predicted the current weak energy demand environment would last well into next year. tcarlisle@thenational.ae