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  • Feb 28th, 2005
  • Comments Off on Qatar and Shell sign $6-$7 billion LNG deal
Gas giant Qatar and Anglo-Dutch major Royal Dutch/Shell signed a $6-$7 billion liquefied natural gas (LNG) deal on Sunday to ship gas to north America and Europe. Officials and company executives said the Qatargas 4 project involves the development of upstream gas production facilities to produce 1.4 billion cubic feet a day of gas and large volumes of associated liquids from Qatar's North Field, and a single 7.8 million tonnes per year LNG train for a period of 25 years.

Qatargas 4 is a joint venture, with state-run Qatar Petroleum (QP) holding 70 percent and Shell the remainder. LNG deliveries are expected to start around 2010-2012.

Officials said the total $6-$7 billion value of the deal, part of QP's efforts to become the world's top LNG producer, includes the cost of transports.

The statement said two new companies had been formed to manage the LNG importation, terminal operations and sales of natural gas to ExxonMobil Gas Marketing Europe, which will in turn sell it to UK markets. Qatar Petroleum and affiliates own 70 percent of the two firms while ExxonMobil or affiliates of the US oil giant own the rest.

The statement said the agreements announced in December were extensions of a 2002 heads of agreement between the two sides for development of two LNG trains to supply gas to Britain.

The feed gas for the two trains will be sourced from Qatar's giant North Field, which has proven reserves of more than 900 trillion cubic feet (25 trillion cubic meters), the third largest in the world.

It amounts to more than 15 percent of the world's total proven gas reserves, and is enough to last the tiny Gulf state about 250 years.

Doha plans to boost annual LNG production to more than 88 million tons in 2012 from a projected 20 million this year as part of an all-out push to become the world's biggest LNG exporter and a global energy giant.

Copyright Reuters, 2005


Copyright Agence France-Presse, 2005


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