Qatar Petroleum and ExxonMobil Corporation are going ahead with "the $12 billion Qatargas II project, which will supply LNG from Qatar to the United Kingdom by the winter of 2007-2008", al-Attiyah said in Doha on Wednesday.
Al-Attiyah, who also chairs Qatar Petroleum, made the announcement at a joint news conference with ExxonMobil's director and executive vice president Harry Longwell, calling it the biggest deal in the history of the hydrocarbon industry.
State-run Qatar Petroleum has a 70% stake in Qatargas II while ExxonMobil holds the remaining 30%, a statement said.
It said contracts worth about $4.5 billion had been signed for the construction of platform topsides, pipelines and two LNG trains at Ras Laffan Industrial City in Qatar in connection with the project.
A total of $7.6 billion was raised from 57 institutions, "the largest energy project financing ever and the first ever financing on a full LNG chain-integrated basis", according to Faisal al-Suwaidi, vice chairman and CEO of Qatargas II.
ExxonMobil Europe will sell the
product to UK markets
"Working together with our partner ExxonMobil, we have been able to significantly reduce the costs of delivering LNG to the UK and so create a strong, finance-able project," al-Attiyah said.
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% of the two firms while ExxonMobil or affiliates of the US oil giant own the rest.
The statement said the agreements announced on Wednesday were extensions of a 2002 deal between the two sides for development of two LNG trains to supply gas to Britain.
"We have been able to significantly reduce the costs of delivering LNG
to the UK"
Abd Allah bin Hamad al-Attiyah,
Qatari Energy Minister
The feed gas for the two trains will be sourced from Qatar's giant North Field, which has proven reserves of more than 25 trillion cubic metres, the third largest in the world.
It amounts to more than 15% of the world's total proven gas reserves, and is enough to last the tiny Gulf state about 250 years.
Qatar plans to boost annual LNG production to 60 million tonnes by 2010 from the current 18 million as part of an all-out push to become the world's biggest LNG exporter and a global energy giant.