Shell takes second stake in Qatar’s mega LNG project

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Shell is the latest energy giant to post a sharp downturn in profits, unveiling £5.1bn ($6.24bn) earnings over the third quarter - a 38 per cent decline year-on-year - reflecting a normalising market after last year's commodities boom fuelled record results across the world's major oil and gas players.
Shell is the first energy giant to post a sharp downturn in profits for 2023 as the oil market settled lower than the historic pricing seen in 2022

Shell is investing in the second phase of a mega liquefied natural gas (LNG) project in Qatar, just three months after buying into the initial stages of the development.

The energy giant has been selected to participate in the next wave of Qatar’s LNG expansions – the North Field South project (NFS). 

Shell will acquire a 9.375 per cent participating interest in the NFS project, worth around $1.5bn.

This follows French rival TotalEnergies joining the project in September with an identical stake.

Energy Minister Saad Al-Kaabi has allocated 25 per cent for international partners.

Qatar Energy will hold the remaining 75 per cent.

Kaabi has previously announced plans to offload stakes to four companies in total, meaning there is a 6.25 per cent stake to be split up between two more companies.

Qatar is boosting its production and LNG capacity amid a global surge in demand for gas, with Europe fighting to stave off supply shortages this winter.

Shell previously invested as a partner in the country’s North Field East (NFE) project, alongside TotalEnergies, Exxon, ConocoPhillips and Eni.

It will hold a 6.25 per cent stake in the project, via a 25 per cent share in a joint venture company which owns a quarter of the project

While NFE will produce a combined LNG capacity of 32m tonnes per annum, the newer NFS ramp up Qatar’s overall liquefaction capacity to 126m tonnes on annual basis over the next five years.

NFS is expected to send out its first cargo in 2027, and won’t be in a position to ease supply crunches in the next few years.

Meanwhile, NFE is expected to send out its first shipments in 2026.

Ben van Beurden, Chief Executive of Shell, said: “I am delighted that Shell’s strategic partnership with QatarEnergy is further deepened through our participation in the North Field South project. LNG has a key role in ensuring energy system reliability and our investments with QatarEnergy will support the energy transition and energy security, two of the most fundamental challenges the world faces today.”