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Gulf Times: Qatar to meet chunk of global gas demand

Published: Sunday, 11 February, 2007, 10:02 AM Doha Time 
By Pratap John

EVEN as the global demand for liquefied natural gas is estimated to touch about 420mn tons by 2015, Qatar is boosting its LNG production to meet a large chunk of the need by investing about $50bn in new facilities under Qatargas and RasGas.

“Qatargas itself is now establishing four trains and these will be brought online by 2010. At that stage, Qatargas, the state’s first LNG producer, will clock an annual production capacity of 42mn tonnes and help Qatar’s production to be ramped up to 77mn tons,” Qatargas chairman and CEO Faisal M al-Suwaidi said in an interview with Gulf Times yesterday.

Qatargas now produces about 10mn tons of LNG annually from existing three LNG trains (1, 2 & 3). They have already attained the optimum production level of 3.3mn tons each.

He said the start-up of the four trains would be on schedule. Qatargas Trains 4 & 5 will start up next year under Qatargas-II. Train 6 (Qatargas- III) will come online in 2009 and train 7 (Qatargas IV) a year later in 2010.

All these trains, al-Suwaidi said, would be the world’s largest at an annual production capacity of 7.8mn tons each.

The chairman said the existing three LNG trains (1, 2 & 3), under Qatargas-I, had already attained the optimum production level of 3.3mn tons each.

This has been achieved through a successful debottlenecking in 2006. Before debottlenecking these trains were having a capacity of about 2mn tons each.Qatargas-I supplies LNG under long-term sale and purchase contracts to customers in Japan and Spain.

On the other hand, Qatargas-II, Qatargas-III and Qatargas-IV will be supplying markets in Europe, the US and the UK.

By 2010, al-Suwaidi said, Qatargas would be exporting condensate and sulphur besides LNG to virtually every corner of the globe. Qatar’s strategy itself is to reach every market of the world.

“Natural gas is increasingly becoming the fuel of choice for customers around the world due to its clean-burning and lower emission qualities. LNG is a way of delivering natural gas around the world safely and reliably,” al-Suwaidi said.

On Qatar’s LNG industry entering the second decade he said: “We have gone past a very eventful and significant 10 years. We broke records at every stage of LNG facility expansion. When we had set up our first trains with 2mn tons capacity each, we were the largest in the world. Now at 7.8mn tonnes per year (tpy), some of our LNG trains are again the world’s largest.

“Also, by ordering LNG tankers with cargo capacities exceeding 260,000 cu m (m3) we are entering record books yet again. We have always been ahead of technology. Technology providers need to invent newer ones to meet our requirements.”

He said Qatar would always remember with gratitude Japanese customers led by Chubu Electric who had actually put the state’s LNG industry on the global map. “When Japan decided to buy LNG from us, many sceptics thought the Japanese buyers were committing a mistake. That was a period of regional skirmishes. But Japanese customers stood ground and decided to lift some 4mn tonnes of LNG from Qatar.

“If they had not taken 4mn tonnes from us then, we may not have been talking about the 77mn tonnes now at all,” al-Suwaidi said. 

Currently, Qatargas supplies LNG to eight companies in Japan. The majority of these are power and gas firms which supplies to millions of domestic users in the Japanese market.
Asked how Qatar with its limited spare capacity would meet the increasing demand for LNG from existing customers, including those from Japan, the chairman said: “It is true we have declared a moratorium on scaling up production at the North Field pending a reservoir study. Nevertheless, we will meet the extra LNG needs of our long-term customers including Japan, mostly through spot cargoes. Japan is our first customer and it is top in our priority list.”

He justified the moratorium on the North Field, saying Qatar needed to properly balance and national interest and its commitment to the global LNG industry.

“At 900tn cubic feet, our North Field is a huge reservoir. But we need to conserve energy in national interest. For this reason it is important for our customers as well. Because our LNG deals have been built on trust and reliability,” al-Suwaidi pointed out.

He also said Qatargas pioneered the development of both Q-Flex and Q-Max LNG tankers, which by industry standards, were a quantum leap in the capacities of liquefied natural gas vessels.

The new vessels will have many innovative features to maximise cargo deliveries and to ensure the highest levels of safety and reliability. And they will be about 80% larger than the current LNG fleet.

They will be ferrying Qatargas cargoes to LNG receiving terminals in Japan, the US (Golden Pass), UK (Milford Haven) and elsewhere in Europe.

Qatargas dispatched its first ever LNG cargo in 1996. By 2006-end, Qatargas has successfully delivered about 1,100 LNG cargoes to customers around the world. This includes spot cargoes to customers in Spain, Japan, the USA, France, Turkey and the UK.

The shareholders of Qatargas I are Qatar Petroleum (65%), ExxonMobil (10%), Total (10%), Mitsui (7.5%) and Marubeni (7.5%).Qatargas-II shareholders are (Train 4 – QP 70%) and ExxonMobil 30%). In train 5 QP has a 65% stake, while ExxonMobil has 18.3% and Total 16.7%. Qatargas-III shareholders are QP (68.5%), ConocoPhillips (30%) and Mitsui (1.5%).

Qatargas-IV shareholders are Qatar Petroleum (70%) and Royal Dutch Shell (30%).

“There is a real diversity among our shareholders. Together we work to realise our dream of becoming the world’s leading supplier of LNG by 2010. At that stage we will be exporting about 42mn tonnes a year,” al-Suwaidi added.  

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