At least things are transparent in Qatar. Saad Sherida Al-Kaabi is both the minister of energy and the CEO of Qatar Energy. In this latter capacity, he signed on Saturday, 24 September, a major agreement with Patrick Pouyanné, CEO of France’s TotalEnergies. Mr. Pouyanné may not be a minister but he is still the representative of French interests in the minds of these Gulf colleagues.
Mr. Pouyanné’s group is investing $1.5 billion (€1.55 billion) in the North Field South (NFS) gas field in exchange for a 9.4% stake in the joint venture, of which Qatar will hold 75%. Other partners will be invited to participate in the capital, but TotalEnergies will be the largest stakeholder among them.
The French company maintains close relations with the small emirate, the world’s fourth largest producer of gas and, above all, the leader in liquefied natural gas (LNG). This process, which allows gas to be transported anywhere by ship, became strategic for Europe when Russia closed the tap on Nord Stream 1, their main gas pipeline into Germany via the Baltic.
TotalEnergies has been anticipating the LNG rush for several years, so much so that it expects liquified natural gas to represent 50% of its sales by 2030. As a result of this, it was also one of the first investors in the North Field East award in June. The company has invested $2 billion in this gas field, equivalent to an estimated production capacity of 32 million metric tons per year, twice that of its cousin North Field South. The North Field complex, shared with Iran, is currently the largest gas field in the world.
These two pieces of good news for the French energy giant, three months apart, will not affect France’s immediate winter constraints, since deliveries will not take place until 2025. Nevertheless, it must have cooled the heat on Mr. Pouyanné, who has been facing continued criticism from environmentalists as well as the wrath of left-wing MPs seeking to tax his super-profits and oppose his controversial business activities in the Russian Arctic. For its part, Qatar is accused of labor abuse and ecological crime in connection to the football World Cup, which will begin on November 20 in air-conditioned open-air stadiums.
The two partners may well try to explain that the exploitation of the gas will be subject to CO2 capture but that will not be enough to appease their critics, who feel that the French are simply swapping one evil for another. European reasoning prefers to turn a blind eye to realpolitik, an integral part of the energy business since its origins.
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