DOHA: Europe is facing a painful “industrial rationalization” because of its energy crisis which risks causing political unrest, the boss of Shell warned on Sunday October 23, as the oil giant joins a natural gas project in the Qatar.
Shell chief executive Ben van Beurden has agreed a deal for a 9.3% stake in Qatar Energy’s North Field South project, which will play a major role in the Gulf state’s efforts to boost production of liquefied natural gas (LNG) by 50% over the next few years. five years.
Speaking at the signing ceremony in Doha, van Beurden said European industry was badly hit by the energy crisis, made worse by Russia’s invasion of Ukraine.
Europe has reduced consumption “quite effectively, quite significantly” following the loss of 120 million tonnes of Russian gas per year, van Beurden said, but “much of that reduction is achieved by turning off the industry”.
Europe has been desperate for quick alternatives to Russian gas, but van Beurden said Europe will need large amounts of LNG for decades.
“A lot of people say turn down the thermostat or don’t turn on the air conditioning,” he said.
“But there’s also ‘why don’t we shut down the fertilizer plant that we have’ or ‘reduce production of some petrochemicals in general’. And that rationalization, if it lasts long enough, becomes permanent. “
“PRESSURE”
Van Beurden said there had been “a few victory laps” in Europe on how it had reduced demand, but added that “some of it is actually bad news in the long run, namely economic or industrial rationalization”.
The Shell chief, who will retire at the end of the year, said the industrial cuts could trigger some “rejuvenation”, but they also carried risks.
“To do it on this scale, this abruptness, at a time of economic challenges in general, I think it will bring quite a bit of pressure on European economies, and possibly also a lot of pressure on the political system in Europe.” , did he declare. .
The British company Shell is the second European company, after the French TotalEnergies, to take a stake in North Field South.
Twenty-five percent of the project has been earmarked for international energy giants.
The expansion through the North Field, the world’s largest proven gas reserves, aims to increase Qatar’s LNG production by 50% to around 127 million tonnes per year by 2027.
Shell and TotalEnergies took stakes at the start of the year in the North Field East area.
“Natural gas takes on greater importance in light of the recent geopolitical turmoil,” Qatar’s Energy Minister Saad Sherida al-Kaabi said, welcoming the deal with Shell.