Meed | Region boosts LNG spending

Region boosts LNG spending

29 April 2024

This package also includes: Gulf players secure future of LNG projects

There has been a sharp rise in investment in projects aimed at expanding the production of liquefied natural gas (LNG) in the Gulf region since the start of this decade.

A capital expenditure of close to $38bn has been made by Middle East and North Africa hydrocarbons producers in the past 10 years, mainly on projects to increase LNG output capacity, according to data from regional projects tracker MEED Projects.

Almost three quarters of that spending has taken place in the past four years, and predominantly in the GCC.

The rise in the importance of natural gas, and therefore LNG, as an energy transition fuel has led to strong growth in its demand worldwide. Global trade in LNG reached 404 million tonnes in 2023, up from 397 million tonnes in 2022, with tight supplies of LNG constraining growth, energy major Shell said in a recent report.

Global LNG demand is expected to rise by more than 50% by 2040, as industrial coal-to-gas switching gathers pace in China and countries in south and southeast Asia use more LNG to support their economic growth.

Gulf players are keen to cater to this growing demand and dominate the global supply market, fuelling a wave of investment in large-scale production-boosting projects and terminal construction schemes.

The total LNG production capacity of the GCC is expected to reach an estimated 200 million tonnes a year (t/y) by 2030, cementing the region’s position as the world’s largest LNG supplier.

Taking the lead

Qatar has been jostling with the US and Australia for the title of world’s largest LNG provider for many years. Each of these three producers have clinched the top spot at different points, only to be unseated by one of the others again.

However, when its North Field LNG expansion starts to come online later in this decade, Qatar will be able to consolidate its position as the world’s largest producer and exporter of LNG in the long term.

State enterprise QatarEnergy is understood to have spent almost $30bn on the two phases of the North Field LNG expansion programme, North Field East and North Field South, which will increase its LNG production capacity from 77.5 million t/y to 126 million t/y by 2028. Engineering, procurement and construction (EPC) works on the two projects are making progress.

QatarEnergy awarded the main EPC contracts in 2021 for the North Field East project, which is projected to increase LNG output to 110 million t/y by 2025. The main $13bn EPC package, which covers engineering, procurement, construction and installation of four LNG trains with capacities of 8 million t/y, was awarded to a consortium of Japan’s Chiyoda Corporation and France’s Technip Energies in February 2021.

QatarEnergy awarded the $10bn main EPC contract for the North Field South LNG project, covering two large LNG processing trains, to a consortium of Technip Energies and Lebanon-based Consolidated Contractors Company in May 2023.

When fully commissioned, the first two phases of the North Field LNG expansion programme will contribute a total supply capacity of 48 million t/y to the global LNG market.

And Doha is not stopping there. QatarEnergy announced a third phase of its North Field LNG expansion programme in February. To be called North Field West, the project will further increase QatarEnergy’s LNG production capacity to 142 million t/y when it is commissioned by 2030.

The North Field West project will have an LNG production capacity of 16 million t/y, which is expected to be achieved through two 8 million t/y LNG processing trains, based on the two earlier phases of QatarEnergy’s LNG expansion programme. The new project will draw feedstock for LNG production from the western zone of Qatar’s North Field offshore gas reserve.

Muscat moves up

Oman has been supplying LNG to customers, mainly in Asia, for many years. Majority state-owned Oman LNG operates three gas liquefaction trains at its site in Qalhat, with a nameplate capacity of 10.4 million t/y. Due to debottlenecking, the company’s complex now has a production capacity of about 11.4 million t/y.

France’s TotalEnergies has also committed to becoming a major LNG supplier in the sultanate. In partnership with state energy holding conglomerate OQ, TotalEnergies has achieved final investment decision on a major LNG bunkering and export terminal in Oman’s northern city of Sohar.

TotalEnergies is leading the Marsa LNG joint venture, which is developing the Sohar LNG terminal project. Marsa LNG was formed in December 2021 by TotalEnergies and OQ, with the partners owning 80% and 20% stakes, respectively.

Marsa LNG plans to develop an integrated facility consisting of upstream units that will draw natural gas feedstock from TotalEnergies’ hydrocarbons concessions in Oman, particularly from the sultanate’s Blocks 10 and 11.

The joint venture is also planning an LNG bunkering terminal and storage units located in Sohar port, and a solar photovoltaic plant to power the LNG terminal.

The Marsa LNG terminal will have a single train with the capacity to process about 1 million t/y of natural gas into LNG. The bunkering terminal will mainly supply LNG as a marine fuel to vessels. Marsa LNG has selected France’s Technip Energies to perform EPC works on the estimated $1bn project.

Adnoc’s ambitions

Abu Dhabi National Oil Company (Adnoc) has historically been one of the GCC’s smaller LNG producers. Adnoc Group subsidiary Adnoc Gas operates three large gas processing trains on Das Island.

At its Das Island terminal, Adnoc Gas has an LNG liquefaction and export capacity of about 6 million t/y. The facility’s first and second trains were commissioned in the 1970s and have a total combined output capacity of 2.9 million t/y. The third train came into operation in the mid-1990s and has a capacity of 3.2 million t/y.

The LNG production and export capability of Adnoc Gas will receive a major boost when a new greenfield terminal that it has committed to developing in Ruwais, Abu Dhabi, comes online before the end of this decade.

The planned LNG export terminal in Ruwais will have the capacity to produce about 9.6 million t/y of LNG from two processing trains, each with a capacity of 4.8 million t/y. The facility will ship LNG mainly to key Asian markets, such as Pakistan, India, China, South Korea and Japan.

In March, Adnoc Group announced that it had issued a limited notice to proceed to a consortium of contractors for early EPC works on the Ruwais LNG terminal project.

The limited notice to proceed was given to a consortium led by Technip Energies, consisting of Japan-based JGC Corporation and Abu Dhabi-owned NMDC Energy.

The overall value of the export terminal project is estimated to be more than $5bn. Adnoc is expected to issue the full EPC contract award for the Ruwais project in June this year.

Gulf players secure future of LNG projects

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Indrajit Sen

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Representatives from KBR met with Abdussalam Elansari, chairman of the Renewable Energy Authority of Libya, earlier this month to discuss project opportunities, sources said.

The meeting with Elansari followed KBR’s opening of a new branch in Libya and its securing of several contract awards in the oil and gas sector.

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WSP is the technical adviser, and KPMG Middle East is the lead and financial adviser.

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Oman awards exploration blocks to state upstream firm
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Oman’s Ministry of Energy & Minerals (MEMR) has awarded state-owned upstream firm OQ Exploration & Production (OQEP) exploration rights for three hydrocarbon blocks in the sultanate.

OQEP, which is 75% owned by Omani state energy group OQ, has secured rights for Blocks 36, 43A and 66.

Under the agreements, OQEP will conduct geological and geophysical surveys, analysis and modelling, and drill exploratory wells at the three blocks, with the aim of developing recoverable reserves.

Neither MEMR nor OQEP disclosed the blocks’ locations, areas or prospective reserves in their statement.

OQEP’s portfolio comprises 14 upstream oil and gas exploration and production assets in Oman, covering onshore and offshore operations and assets held under service contracts.

Formerly known as Oman Oil Company Exploration & Production, OQEP’s flagship assets include Block 60, which contains the Abu Tubul and Bisat oil fields, and Block 48. The company also holds strategic interests in gas-producing Blocks 9, 10 and 61.

Offshore expansion

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ALSO READ: Concession deals boost momentum in Oman mining

Under the concession agreement, Petronas holds a 70% participating interest and operatorship, while OQEP holds the remaining 30%.

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Block 27 is operated by US-based Occidental Petroleum, which holds a 65% participating interest under an exploration and production-sharing agreement valid until 2035.

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Indrajit Sen

Saudi Arabia qualifies firms for gas-fired IPPs

28 September 2026

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Principal buyer Saudi Power Procurement Company (SPPC) has qualified 13 companies to bid for the third round of Saudi Arabia’s combined-cycle gas turbine (CCGT) independent power producer (IPP) programme.

The projects will comprise new CCGT plants developed on a build-own-operate basis. Each project will be implemented through a special-purpose project company wholly owned by the successful bidder.

The qualified firms are:

Abu Dhabi National Energy Company [Taqa] (UAE)
Acwa (Saudi Arabia)
Al-Bawani Capital (Saudi Arabia)
Al-Jomaih Energy & Water (Saudi Arabia)
EDF (France)
Etihad Development Company (UAE)
Kepco (South Korea)
Marafiq (Saudi Arabia)
Mitsubishi Power (Japan)
Nesma Renewable Energy (Saudi Arabia)
PowerChina (China)
Saudi Energy (Saudi Arabia)
Sumitomo Corporation (Japan)

Developers submitted statements of qualification for the round on 23 August, as exclusively reported by MEED.

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Also in September, MEED exclusively reported that US-based GE Vernova was close to finalising a turbine reservation agreement with SPPC for the plants.

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The request for qualifications released by SPPC in July did not specify the number, locations or capacities of the projects, which mark the next stage of its CCGT IPP programme.

The first round comprises Taiba 1, Taiba 2, Qassim 1 and Qassim 2, with a combined capacity of 7,200MW.

The second round comprises Rumah 1, Rumah 2, Nairyah 1 and Nairyah 2, also with a combined capacity of 7,200MW.

Saudi Arabia’s Acwa recently said it had begun initial commercial operations at the Taiba 1 and Qassim 1 CCGT power plants.

US/India-based Synergy Consulting is the financial adviser for the procurement; Germany’s Fichtner is the technical adviser; and UK-headquartered Eversheds Sutherland is the legal adviser.

READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF