Japan's Mitsui in Advanced Talks for Stake in Qatar’s North Field LNG Project

Japan's Mitsui & Co is close to buying a stake in the second phase of QatarEnergy's massive North Field project as it seeks to secure stable liquefied natural gas (LNG) supply, five sources close to the matter told Reuters.

If reached, the deal would bolster Japan's energy security as it looks to meet an increase in electricity demand from the artificial intelligence boom with conventional fuels, since adoption of renewable power is slowed by delays at wind power projects.

It would also give Qatar, the world's second-largest LNG producer after the United States, a greater weighting in Tokyo's energy portfolio after the Middle Eastern country struck a vast 27-year supply deal earlier this week with JERA, Japan's top power generator.

QatarEnergy did not respond to a request for comment and Mitsui declined to comment.

The sources spoke on condition of anonymity as the matter is not yet public. The size of the stake and its value were not immediately available.

"Talks are at an advanced stage," said one of the sources.

Another industry source said Mitsui and QatarEnergy are finalising terms.

The North Field LNG project, which will be the world's largest, is expected to boost QatarEnergy's output of the super-chilled fuel by about 64% to 126 million metric tons per annum by 2027, from 77 mtpa now.

Of that, the second phase, called North Field South, will add 16 mtpa at a cost of about $17.5 billion, according to a 2024 research report by the Japan Organization for Metals and Energy Security.

Talks at 'Advanced Stage'

QatarEnergy holds a 75% stake in North Field South while majors TotalEnergies and Shell hold 9.375% each and ConocoPhillips has a 6.25% stake.

Mitsui, a trading house, said in 2023 that it was considering buying a stake in the project to secure stable LNG supply.

A deal would extend cooperation between the companies after Mitsui signed a 10-year deal with QatarEnergy in 2024 for supply of condensate, a byproduct of the natural gas production process.

One of the sources said Malaysia's Petronas has also expressed interest in an equity stake in the project, without giving further details.

Petronas did not respond to a request for comment.

In addition to the equity stake, Mitsui will receive some Qatari supply through JERA's recent deal, while Japanese regional utilities Tohoku Electric Power and Kyushu Electric Power are also keen on buying Qatar LNG via JERA, two of the sources said.

Tohoku declined to comment. Kyushu did not have immediate comment and JERA did not respond to requests for comment.

(Reuters - Reporting by Yuka Obayashi in Tokyo, Marwa Rashad in London and Emily Chow in Doha; Editing by Katya Golubkova, Florence Tan and Raju Gopalakrishnan)

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