Qatar Petroleum inked several blockbuster liquefied natural gas (LNG) transactions last week involving development of its North Field, which eventually could become the world's largest LNG supplier.
The company signed a $6 billion deal with Royal Dutch/Shell Group for development of another LNG train. In addition, France's Total bought a 16.7% stake in the Qatargas II LNG train from partners Qatar Petroleum and ExxonMobil for about $1 billion. And Distrigas Europe signed a 20-year contract last week with the Qatargas II partners for delivery of 2.05 million metric tons/year of LNG through the Zeebrugge import terminal in Belgium.
"Qatar's goal to be the world's leader in LNG production is further secured through the development of large-scale projects such as this," said Al Attiyah, Qatar's energy minister, regarding the Shell transaction for another LNG train. The tiny Middle Eastern country, which holds about 9% (509 Tcf) of the world's natural gas reserves, expects to be the world's largest LNG supplier by the end of the decade.
Last October Qatar Petroleum signed a $12 billion agreement with ExxonMobil covering development of 26 Tcf of North Field reserves and construction of two LNG trains (Qatargas II ) with output of 15.6 million tons/year (2 Bcf/d).
The new heads of agreement (HOA) with Royal Dutch/Shell calls for development of another LNG train in Ras Laffan City. The Qatargas 4 train will include the integrated development of upstream gas production facilities with capacity to produce 1.4 Bcf/d of gas and substantial quantities of associated liquids, a single LNG train yielding 7.8 million tons/year for 25 years, and shipping of the LNG to the intended markets in North America and Europe.
Qatargas 4 will be a joint venture between Qatar Petroleum and Shell with 70% and 30% equity interests, respectively. LNG deliveries are expected to commence around 2010-2012.
Total's purchase last Monday covers up to 5.2 million tons of LNG per year from Qatargas II for a period of 25 years. The start-up of Train II of the Qatargas 2 project is expected by the end of 2008. Total is one of the founding partners with 10% (20% of the upstream) of Qatargas.
Wrapping up a blockbuster beginning for the week, Qatar Petroleum and Shell Chemicals also signed a letter of intent Monday for the development of a $3 billion world-scale ethane-based cracker and derivatives complex in the North Field. The complex will produce petrochemicals products to be marketed into primarily Asian growth markets, with a start-up date early in the next decade.
Shell CEO Jeroen van der Veer said Qatargas 4 will "broaden Shell's LNG supply portfolio to include projects in seven countries, and will provide additional supplies for the growing LNG markets in North America and Europe."
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