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Qatar announces huge rise in gas production amid diplomatic crisis

  • Qatar Petroleum plans to boost gas production from its giant North Field, which it shares with Iran, despite diplomatic tensions between the Gulf Arab state and its neighbors.
  • Qatar in April lifted a self-imposed ban on development of the North Field, the world's biggest natural gas field.
  • That new project will raise Qatar's total liquefied natural gas production capacity by 30 percent to 100 million tons per year.

Qatar Petroleum plans to boost gas production from its giant North Field, which it shares with Iran, by 20 percent after new gas development, QP's chief executive said on Tuesday, despite diplomatic tensions between the Gulf Arab state and its neighbors.

Qatar in April lifted a self-imposed ban on development of the North Field, the world's biggest natural gas field, and announced a new project to develop its southern section, increasing output in five to seven years.

That new project will raise Qatar's total liquefied natural gas (LNG) production capacity by 30 percent to 100 million tons from 77 million tons per year, Qatar Petroleum's CEO Saad al-Kaabi told a news conference in Doha.

Global LNG demand was 265 million tons in 2016, according to Royal Dutch Shell's annual LNG outlook.

"After further assessment, we have decided that the best way to develop this huge project is by dedicating it to the production and export of liquefied natural gas," Kaabi said.

"We have decided that the best option would be to double the size of the project to 4 billion cubic feet of gas per day... This project will strengthen our position as the world's largest LNG producer and exporter."

QP will need to build new LNG trains to meet the expansion in capacity, Kaabi said.

"We will be looking for international partners to join us," he said, declining to say when a tender would be issued.

The announcement comes a day after France's Total signed an agreement with Iran to develop its part of the shared off-shore gas field that Tehran calls South Pars.

Kaabi said there is no cooperation with Iran on any project in the North Field, but the countries have a joint committee that meets every year to discuss development of the field.

"We know what they [the Iranians] are doing and they know what we are doing," he said.

Iran, which suffers severe domestic gas shortages, has made a rapid rise in production from South Pars a top priority.

The deal on Monday with Total is to develop its South Pars Phase 11 project, the first major Western energy investment in the country since the lifting of sanctions.

Gulf OPEC member Qatar, a future World Cup host with a population of 2.7 million, faces sanctions by Saudi Arabia, the United Arab Emirates, Egypt and Bahrain who have severed diplomatic and transport ties with Doha, accusing it of supporting terrorism. Qatar denies the accusation.

The four Arab states meet on Wednesday to discuss how to end the crisis or impose further sanctions on Qatar, which could include asking trade partners to pick a side in the Gulf rift.

Kaabi said the company's operations would not be affected by the crisis.

"Qatar Petroleum will continue working...If some companies decide they don't want to work with QP that's their choice. We will find other foreign companies to work with," he said.