Qatar, Shell finalise $6 billion deal

Qatargas and Shell are to finalise a $6 billion gas investment deal which will supply global markets with Liquefied Natutal Gas.

    Qatar's ambition is to become the world's largest gas producer

    Gas giant Qatar and Anglo-Dutch major Royal Dutch/Shell are to sign a $6 billion deal on Sunday to supply liquefied natural gas (LNG) to global markets, the chief executive officer of Qatargas said.

    Faisal al-Suwaidi said the Qatargas-4 deal would handle a super cooling facility - train 7 - with an LNG production capacity of 7.5 million tonnes a year.

    Industry sources say the project is expected to send the 7.5 million tonnes a year of LNG, gas super-cooled to liquid for transport on tankers, to the US where declining domestic natural gas production has heightened demand for imports.

    Start up is expected around 2010.

    Qatar's ambition

    This deal is also said to boost Qatar's ambition to become the world's largest natural gas producer by 2011, and will strengthen the Anglo-Dutch oil major's number one position as a private supplier.

    Shell could not be reached for further comment on the deal.

    Qatar holds the world's third largest natural gas reserves (509 trillion cubic feet) behind Russia and Iran.

    Most of it is in the off-shore North Field which Shell discovered in the 70s.

    Global markets

    Japan and South Korea are the world's two largest LNG importers, with India recently becoming a significant buyer.

    There are two means natural gas producers utilise to turn their natural resources into cash from remote markets.

    One is via Liquefied Natural Gas (LNG), and the other is via Gas-to-Liquids (GTL).

    GTL is the term given to a number of gas-to-liquids processes, primarily the formation of liquid hydrocarbons and dimethyl ether ormethanol, from natural gas.

    SOURCE: Agencies


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