Thursday’s deal is the largest LNG import project to supply gas to the United States, said Qatar’s Oil Minister Abd Allah al-Attiyah. The project will produce 15.6 million tonnes of LNG per year.
“It makes Qatar Petroleum (QP) and Exxon Mobil leaders in supplying the important US natural gas market,” said al-Attiyah.
It is the largest single investment in Qatar’s growing energy industry.
The plan will expand existing capacity at the Rasgas complex by setting up two more LNG trains each of 7.8 million tonnes a year capacity.
The new trains at Rasgas, which now produces 6.6 million
tonnes annually, will be 70% owned by QP and 30%
by Exxon Mobil.
Deliveries of gas are targeted to reach the United States
in 2008-2009. The pact extends for more than 25 years.
US natural gas prices have risen sharply in recent years
as lean stocks and fast decline rates at domestic fields
tighten supply and surging power consumption boosts demand.
Qatar oil minister al-Attiyah says
LNG, natural gas super-cooled and condensed for
transportation aboard tankers, is seen by many US lawmakers
as an important component of long-term US fuel supply.
Harry Longwell, Director and Executive Vice President of
Exxon Mobil, has said several locations are currently under
evaluation for developing receiving terminals and the
permitting process will be initiated in the fourth quarter of
Exxon Mobil holds a 25% stake in the existing two
trains of 3.3 million tonnes a year capacity at the Rasgas
complex, whose output mostly goes to South Korea’s Kogas under a 25-year deal, but also to the spot market.
QP holds 63% of the remaining shares, Kogas, 5%,
Itochu Corp, 4%, and LNG Japan Corp, 3%.
Qatar has invested more than $12 billion in the last 10
years to develop its gas resources, the third largest in the
world after Russia and Iran.
Qatar currently sells about 15 million tonnes, mainly to Japan and South Korea, but also to Spain and the United States.
In late June, Qatar’s first project, Qatargas, signed a deal with ConocoPhillips to set up a 7.5 million tonnes a year plant to supply the US market from 2008 or early 2009.
Rasgas has also signed deals to supply 7.5 million tonnes to India’s Petronet, 3.5 million tonnes to Italy’s Edison and three million tonnes to Taiwan’s Chinese Petroleum Corporation.
Qatar’s other big LNG project, Qatar Liquefied Gas Company (Qatargas), has the current capacity to produce 7.7 million tonnes a year.