•  
  •  
  •  
  •  
  •  
  • Untitled Document
    Untitled Document

    Global impact of North American shale gas boom forces Qatar to shift focus

    Mark Young, Evaluate Energy

    The global impact of the US shale gas boom was in further evidence this week as Qatar Petroleum, along with its MOU partner, Centrica, made its first move into the North American E&P market in a $1 billion acquisition of Canadian assets from Suncor Energy. North America had been earmarked by Qatar as a guaranteed market to sell its copious Liquefied Natural Gas (LNG) export capacity in, but the US Shale boom has turned this idea on its head, as the middle-eastern NOC becomes the latest foreign power to move into the North American E&P arena. The assets being acquired (to be 40% owned by Qatar Petroleum) are well spread over the country in 3 provinces, and the British Columbia set of the assets will no doubt form a potential export opportunity as Kitimat becomes Canada’s LNG exporting centre in the coming years.

    A look at Qatar Petroleum’s world-standing will shed light on just how significant a move this is, and just how big an impact the shale boom is having on world energy markets. Qatar is the world’s largest LNG exporter by a significant distance with around 78 million tonnes per year (mtpa) of export capacity, and Qatar Petroleum is the operator of all of it. Its nearest rivals, including Indonesia (34 mtpa), Malaysia (24 mtpa) and Australia (23 mtpa), are dwarfed in comparison. Efforts to catch up with Qatar have been led by the Australians, with plans in place to expand the industry in that country significantly by 2020. But these plans are beginning to fall into ruin, as many projects are being cancelled or delayed for various reasons, chiefly a lack of skilled labour and extreme rises in projected costs  – Chevron’s Gorgon LNG project is now projected to cost US$50 billion, for example. Plans in new regions of potential LNG exports, such as Mozambique/East Africa, are likely to be a long way off into the future, so Qatar, on the face of it, looks to be in an extremely strong position as the global leader of gas exports. Yet it still moved into this new market.

    Recent years have seen Indian, Chinese and other far-eastern NOC’s moving into the North American market following the US shale gas boom, countries without strong domestic markets, but this is arguably the first time a reasonably stable world gas power has felt the need, or has been forced, to join the party. Even as recently as the company’s 2011 Annual Report, Qatar Petroleum lists North America as the target market for its LNG Production “mega-trains” 6 & 7 at its Ras Laffan complex. Whilst the company also listed more ensured markets of Asia and the Middle East as destinations, these “mega-trains” have a total capacity of 15.2 mtpa, and the potential income from exporting this amount of gas to the US had to be replaced, as the LNG import terminals on the American east coast became obsolete and began to sit idle after shale gas began to quickly flood the domestic market.

    In the company’s first move to combat the potential harm caused by the shale gas boom, Qatar Petroleum, along with partner ExxonMobil, submitted plans to the relevant authorities to convert its 15.6 mtpa import facility at Sabine Pass, Texas, into an export terminal of the same capacity, in a clear effort to recoup some of the shortfall back by profiting on US exports in the future. However, this follow-up move into Canadian E&P provides a more immediate solution to Qatar’s problem, with net 2P reserves of around 390 bcfe (90% gas) and net production of 100,000 mcfe/d. In fact, this move is not really any different to what Woodside Petroleum are planning, the company is reportedly in talks over acquiring Canadian gas assets, and Woodside is a company who recently shelved an LNG project in Australia to look for a cheaper option, standing it in stark comparison to the world leader in LNG exports.

    Widescale exports of US/North American shale gas may be as far as 3 to 5, even 10 years into the future, so for the time being, shale gas will remain trapped within those borders. But now the world leading gas exporter has got involved, the global impact of the US shale boom is extremely hard to deny, no matter how trapped the physical quantities of gas maywell be.

    Mark Young, Evaluate Energy

    Evaluate Energy (www.evaluateenergy.com) is a provider of efficient data solutions for oil & gas company analysis. Services include annual and quarterly financial data, M&A, worldwide E&P assets, Refinery and LNG databases and an emerging US/Canadian Shale Gas & Liquids offering.

     

    Related Articles

    ExxonMobil makes VP appointments

    08/07/2014 Exxon Mobil Corp.’s board of directors has elected David S. Rosenthal as vice president and controller, and Jeffrey J. Woodbury as vice president of investor relations and secretary, effective Sept...

    Mexico’s Lower House passes final oil bills, sends them to Senate

    08/04/2014 Mexico’s Lower House passed a final package of bills on Aug. 2 to regulate an end to the nation’s state oil monopoly, sending the legislation to the Senate for final approval after making minor cha...

    ExxonMobil VP and Controller to retire

    08/04/2014

    Patrick T. Mulva, vice president and controller of Exxon Mobil Corp., has announced his intention to retire on Sept. 1, after more than 38 years of service.

    ExxonMobil invests more than $1B in Antwerp refinery

    07/02/2014 ExxonMobil affiliate Esso Belgium, a division of ExxonMobil Petroleum & Chemical BVBA, plans to install a new delayed coker unit at its Antwerp refinery to convert heavy, higher-sulfur residual...

    Statoil: High-impact gas discovery offshore Tanzania

    06/21/2014 Statoil has reported another high-impact gas discovery offshore Tanzania. The discovery in the Piri prospect is Statoil and co-venturer ExxonMobil’s sixth discovery and the fifth high-impact discov...

    More Oil & Gas Financial Articles

    ExxonMobil makes VP appointments

    Thu, Aug 7, 2014

    Exxon Mobil Corp.’s board of directors has elected David S. Rosenthal as vice president and controller, and Jeffrey J. Woodbury as vice president of investor relations and secretary, effective Sept. 1.

    Mexico’s Lower House passes final oil bills, sends them to Senate

    Mon, Aug 4, 2014

    Mexico’s Lower House passed a final package of bills on Aug. 2 to regulate an end to the nation’s state oil monopoly, sending the legislation to the Senate for final approval after making minor changes on pension and retirement issues, according to Bloomberg.

    ExxonMobil VP and Controller to retire

    Mon, Aug 4, 2014

    Patrick T. Mulva, vice president and controller of Exxon Mobil Corp., has announced his intention to retire on Sept. 1, after more than 38 years of service.

    ExxonMobil invests more than $1B in Antwerp refinery

    Wed, Jul 2, 2014

    ExxonMobil affiliate Esso Belgium, a division of ExxonMobil Petroleum & Chemical BVBA, plans to install a new delayed coker unit at its Antwerp refinery to convert heavy, higher-sulfur residual oils into transportation fuels products such as marine gasoil and diesel fuel.

    Statoil: High-impact gas discovery offshore Tanzania

    Sat, Jun 21, 2014

    Statoil has reported another high-impact gas discovery offshore Tanzania. The discovery in the Piri prospect is Statoil and co-venturer ExxonMobil’s sixth discovery and the fifth high-impact discovery in Block 2 offshore Tanzania.

    Most Popular

    Oil & Gas Jobs

    Search More Job Listings >>
    Subscribe to OGFJ