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Bloomberg: Qatar Says Gas Is `Undervalued’ Compared With Oil (Update1)

By Fred Pals

Oct. 30 (Bloomberg) — Qatar, the world’s largest shipper of natural gas, said natural gas is “very, very undervalued” compared with oil.

“I’m unhappy, unsatisfied with the gas price,” Qatari Oil Minister Abdullah bin Hamad al-Attiyah said at an oil conference in London today. The fuel is more environmentally friendly, and projects to construct liquefied natural gas plants have become very expensive, he said.

“The world is underestimating the importance of gas,” Al- Attiyah said.

Qatar, which has the world’s third-largest gas reserves after Russia and Iran, has LNG projects with foreign oil companies including Royal Dutch Shell Plc and Exxon Mobil Corp. It supplies LNG to India, Japan and Korea. Qatar’s proved gas reserves are estimated at about 900 trillion cubic feet of gas, according to BP Plc’s Statistical Review of World Energy.

Qatar’s plans to increase LNG exports won’t be affected by current prices, al-Attiyah said. “Qatar is committed to producing 77 million tons a year by 2010,” he added.

LNG is gas chilled and condensed to liquid form so it can be transported by ship.

To contact the reporter on this story: Fred Pals in Amsterdam at [email protected]

Last Updated: October 30, 2007 07:14 EDT

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