Lloyds List: LNG facilities expand to keep pace with export ambitions

Country plans to become the world's largest LNG exporter within four years
Apr 06, 2006
The expansion of Qatar's liquefied natural gas capacity continues apace as the country aims to become the world's biggest LNG exporter, shipping over 77m tonnes a year from 2010.
Further investment is now in progress at both the Qatargas and Rasgas facilities in Ras Laffan.
In the past few months, Qatar Petroleum, ConocoPhilips and Royal Dutch Shell have announced the engineering, procurement and construction contracts for two further large LNG trains, for the Qatargas 3 and Qatargas 4 LNG projects.
These contracts have been won by a joint venture between Chiyoda and Technip France.
Each of the two trains will have a capacity of 7.8m tonnes annually and the total price for the EPC contract is around $4 billion.
Qatargas 3, jointly owned by QP (68.5%), ConocoPhilips (30%) and Mitsui (1.5%), will produce LNG mainly for shipment to the United States. The first LNG cargoes are expected to be lifted from this train in 2009. In the past few months, Qatar Petroleum, ConocoPhilips and Royal Dutch Shell have announced the engineering, procurement and construction contracts for two further large LNG trains, for the Qatargas 3 and Qatargas 4 LNG projects.
Qatargas 4 is a joint venture between QP (70%) and Shell (30%), and the majority of the LNG produced will again be exported to North America. It is expected that production from this facility will commence towards the end of this decade.
The country's original LNG plant, Qatargas 1, primarily supplies customers in Japan, although short and medium term agreements have been signed to supply LNG cargoes to other markets, including Spain, Turkey, Italy, the USA, France, Korea and the UK.
In January 2004, Qatargas 1 signed an agreement with Spain's Gas natural to supply LNG for a 20-year period, starting from 2005.
In December 2004, QP reached a deal with ExxonMobil to supply LNG to the UK. The $12bn Qatargas II project, in which ExxonMobil has a 30% stake, should be operational by late 2007.
Meanwhile, the development of Rasgas 3, a joint venture between QP and ExxonMobil, is now underway. Last year Rasgas awarded EPC contracts for trains 6 and 7 at its facility, each of which will have capacity for 7.8m tonnes per annum.
The Rasgas 3 project (including LNG transport vessels and other investments) is the largest LNG project that has been announced and is expected to supply gas principally to the US, beginning in 2008-2009.
Rasgas 3 last November signed contracts with Qatar Gas Transport and Teekay Shipping for the long-term charter of 12 large Q-Flex sized LNG vessels.
The ships are being built at the Korean Daewoo, Samsung and Hyundai yards.
The ships will be delivered to Rasgas between March and August 2008 and, with an LNG cargo capacity of between 210,000 and 217,000 cu m, will be the largest ships yet to be associated with a long-term Rasgas agreement.
Under the terms of the time charter agreements, Rasgas will charter these vessels for a period of 20 years to deliver LNG from train 6 into a purpose built terminal in the United Sates Gulf Coast. The completion of these agreements increases the Rasgas long-term charter fleet to a total of 26 ships.
Rasgas I operates two trains, and Rasgas II will have three. Train four became operational last year, and train 5 is expected to come onstream in 2007.
LNG is the star performer in terms of Qatar's export economy. Qatar exported 18.4m tons of LNG in 2004, rising to around 24m tonnes in 2005, as a result of Rasgas 4 coming on stream. As such, LNG now accounts for over 30 per cent of overall export earnings. With increased LNG production, it is expected that LNG export revenues will match that of oil by 2008. Japan is currently the largest importer of Qatar's LNG, followed by South Korea, Spain and India.
In 2006, Qatargas and Rasgas combined are expected to fulfil contracts totalling around 25m tonnes.
This will rise to over 78m tonnes in 2011.

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