After Russia cuts supplies, Italian Oil Giant joins Qatar Gas Project

(AFP) — Italian company Eni on Sunday joined Qatar Energy’s $28.75 billion project to expand production from the world’s biggest natural gas field, days after Russia slashed supplies to Italy.

Eni will own a stake of just over three percent in the North Field East project, Qatar Energy’s CEO told a signing ceremony in Doha.

Qatar announced last week that France’s TotalEnergies will be its first, and largest, foreign partner on the development, with a 6.25 percent share.

Unknown numbers of other companies will also be identified.

“Today I’m pleased… to announce the selection of Eni as a partner in this unique strategic project,” said Qatar’s Energy Minister Saad Sherida al-Kaabi, who is also president and CEO of state-owned Qatar Energy.

The project’s LNG — the cooled form of gas that makes it easier to transport — is expected to come on line in 2026. It will expand Qatar’s LNG production from 77 million tonnes a year to 110 million, Qatar Energy said.

The Qatari company estimates that the North Field, which extends under the Gulf sea into Iranian territory, holds about 10 percent of the world’s known gas reserves.

Russia’s invasion of Ukraine has injected urgency into efforts around the world to develop new energy sources as Western countries try to reduce their reliance on Russia.

On Friday, Eni said it would receive only 50 percent of the gas requested from Russia’s Gazprom, the third day running of reduced supplies. Gazprom has been accused of selling gazprom gas to Rome “lies”These cuts should be considered.

“We have a lot of things to learn from your leadership and also from your standards and from your ability to adapt to very difficult circumstances,”Claudio Descalzi, CEO Eni, spoke to his Qatari counterpart.

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Kaabi declined to reveal the number of additional partners that will be revealed. “We signed with everybody. We’re just not telling you,”He told reporters.

There are more announcements this week. Sources in the industry have spoken out about Shell, ExxonMobil and ConocoPhillips. Bloomberg reported that Chinese companies were also involved.

Qatar, which is one of the world’s biggest LNG exporters, is “sharing the risks of commercialisation” by bringing partners on board, said Thierry Bros, a professor at Paris’s Sciences Po and an expert on energy and climate.

“There could also be a geopolitical vision,”He concluded.

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South Korea, Japan and China have been the main markets for Qatar’s LNG but since an energy crisis hit Europe last year, the Gulf state has helped Britain with extra supplies and also announced a cooperation deal with Germany.

Europe rejected in the past the Qatari long-term energy deals, but the Ukraine conflict has force a shift in Europe’s attitude.

The Russians have suspended natural gas supplies to Poland, Bulgaria and Finland from the Netherlands. They refused to pay in rubles.

“In the near-term, we see LNG demand being all about Europe as those European buyers look to wean themselves off Russian gas,”AFP spoke with Daniel Toleman who is an analyst for Wood Mackenzie’s resources consulting firm.

“But in the longer term, it does switch back to Asia, and Qatar has a shipping advantage over those US projects and it will be able to supply the Asian (customers).”