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Italian energy company to own stake of Qatar Energy after Russian sanctions

Eni will now own just over three percent of the $28bn North Field East project
Qatar's Minister of State for Energy Affairs and CEO of QatarEnergy Saad Sherida al-Kaabi and Claudio Descalzi, CEO of ENI, at the QatarEnergy headquarters in Doha on 19 June 2022 (AFP)

Italian company Eni joined Qatar Energy's project to expand production from the world's most extensive natural gas field on Sunday, days after Russia cut supplies to Italy. 

Eni, the multinational oil and gas company, will now own a stake of just over three percent in the $28bn North Field East project, Qatar's energy minister, Saad Sherida al-Kaabi, who is also Qatar Energy's CEO, said during a press conference in Doha. 

"Today I'm pleased... to announce the selection of Eni as a partner in this unique strategic project," he said. 

Eni CEO Claudio Descalzi told his Qatari counterpart: "We have a lot of things to learn from your leadership and also from your standards and from your ability to adapt to very difficult circumstances." 

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The project's liquified natural gas (LNG), the cooled form of gas that makes it easier to transport, is expected to come on line in 2026. It will help Qatar increase its LNG production by more than 60 per cent by 2027, France's TotalEnergies chief executive Patrick Pouyanne told AFP last week. 

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Qatar announced TotalEnergies as its first foreign partner in the development last week, with a 6.25 percent share.

Qatar Energy estimates that the North Field, which extends under the waters of the Gulf into Iranian territory, holds around 10 percent of the world's known gas reserves.

While more companies are expected to be named as partners, Kaabi refused to divulge how many more partners would be announced. 

However, AFP said industry sources have discussed ExxonMobil, Shell and ConocoPhillips, while Bloomberg reported that Chinese companies were in talks this week.

On Friday, Eni said it would receive only 50 per cent of the gas requested from Russia's Gazprom, the third day running of reduced supplies. 

Rome has accused Gazprom of peddling "lies" over the cuts. Kremlin spokesperson Dmitry Peskov said on Thursday that reductions in supply were not premeditated and were related to maintenance issues, according to Reuters.

Due to Russia's invasion of Ukraine, western countries placed sanctions on Russian oil and gas to cut the Kremlin's primary revenue. 

Despite the sanctions, Russia's revenue has bounced back to pre-war levels and gained around $20bn from oil exports in May after Asian nations, including China and India, increased their imports of Russian fuel after discounts of more than 30 percent. 

As the war enters its fifth month, Jens Stoltenberg, Nato's secretary-general, said in an interview with the German newspaper Bild on Sunday: "We must prepare for the fact that it [the war] could take years. We must not let up in supporting Ukraine."

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