(UPI) — Natural gas production from a field in the Persian Gulf will increase by 10 percent to position Qatar as a stronger energy leader, a top executive said.
Qatar Petroleum said it aims to start work on a new project in the southern sector of the North Field gas project offshore. It shares the field with Iran, which calls it South Pars.
Saad al-Kaabi, the company’s president and CEO, said the new project will increase North Field production by about 10 percent.
“This new project will further strengthen Qatar’s leading position as a major player in the global gas industry and underline the pivotal role of the country’s oil and gas industry as the maintstay of the national economy,” he said in a statement.
Qatar is a member of the Organization of Petroleum Exporting Countries and party to a multilateral deal to curb oil production to correct a lopsided market. Four of the six members of the regional Gulf Cooperation Council are OPEC members and the International Monetary Fund warned last year that exporters faced economic headwinds because of reduced oil export revenues. At the time, the IMF recommended a diversification away from oil.
The move comes as natural gas expands as major economies look to cleaner-burning options. Giles Farrer, a research director for global gas markets at Wood Mackenzie, said Qatar’s decision sends messages across multiple fronts.
“It’s a signal that Qatar intends to increase its market share, which has been falling as other regions have built new capacity,” Farrer told UPI. “But it is also a threat to other developers of new capacity worldwide, as Qatar can add new capacity at a lower cost than anybody else. Any development of the North Field is likely to have a strong liquids component.”
Qatar Petroleum said new production from the North Field could start within the next five years. Iran has long held out its assets in South Pars as strategic holdings for the Islamic republic, the only OPEC member with allowances for more oil production.