Doha, Oct. 16 (Reuters): Gulf gas giant Qatar on Thursday struck a $12-billion liquefied natural gas (LNG) deal with the world’s top oil company Exxon Mobil that aims to supply soaring US demand.
“Total estimated investment, including ships, is about $12 billion,” Qatari oil minister Abdullah al-Attiyah said of the project to produce 15.6 million tonnes a year of LNG.
“This is the largest LNG import project that has been announced for supplying gas to the United States. It makes Qatar Petroleum (QP) and Exxon Mobil leaders in supplying the important US natural gas market.”
The deal, the largest single investment in Qatar’s booming gas sector, will expand existing capacity at the Rasgas complex by setting up two more LNG trains of 7.8 million tonnes a year capacity each.
The new trains at Rasgas, which now produces 6.6 million tonnes annually, will be 70 per cent owned by QP and 30 per cent by Exxon Mobil.
Deliveries of gas are targeted to reach the United States in 2008-2009 in the pact that 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.
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, said several locations are currently under evaluation for developing receiving terminals and the permitting process will be initiated in the fourth quarter of 2003.
Exxon Mobil holds a 25 per cent 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 per cent of the remaining shares, Kogas, five per cent, Itochu Corp, 4 per cent, and LNG Japan Corp, 3 per cent.
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.
