A statement from ExxonMobil said: "The two entities [Qatar Petroleum and ExxonMobil] have collectively decided not to progress the gas-to-liquids project and instead to pursue the development of the Barzan Project in the North Field."


The gas project had been expected to start production by 2011.


Qatar Petroleum has, however, offered the US firm participation in the Barzan gas project, as well as offering participation rights in all future phases of the project to ExxonMobil Middle East Marketing Ltd, ExxonMobil said.


"The Barzan Project is a very important strategic project for Qatar," Abdullah bin Hamad al-Attiyah, Qatar's energy minister, was quoted as saying in ExxonMobil's statement.