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Qatar, Shell Talk on Joint Projects Outside Country

By Fred Pals

June 14 (Bloomberg) — Qatar, the world’s biggest exporter of liquefied natural gas, is in talks with Royal Dutch Shell Plc to jointly invest in oil and gas projects outside the country, Qatar’s oil minister said.

“Shell is one of the biggest investors in Qatar with the Pearl and QatarGas4 projects,” Abdullah bin-Hamad Al-Attiyah said in an interview today in Amsterdam. “Now we are also talking with Shell on how to invest outside Qatar,” he said, declining to give more details except that investments in the energy industry could be made “everywhere” in the world.

The Hague-based Shell, the biggest non-state liquefied natural gas producer in the world, fully owns the Pearl gas-to- liquid plant and holds a 30 percent stake in the QatarGas4 LNG project. Both projects are scheduled to come on stream next year with peak production seen at 320,000 barrels of oil equivalent a day and 280,000 barrels of oil equivalent a day, respectively.

Qatar, holder of the biggest gas reserves in the world after Russia and Iran, will earn more than $153 billion in gas sales in the next three years, the International Monetary Fund said in a report in March. Shell has pledged to spend between $31 billion and $32 billion this year, the industry’s biggest spending program, as it bets on multibillion dollar projects in Qatar, Russia and Canada to help revive production growth.

LNG Cargoes Diverted

Al-Attiyah said there are “some” LNG cargoes that are being diverted to Asia, with “five million” tons of LNG going to China. The country is also in talks to deliver cargoes to Thailand and other countries in Asia, he said.

“We aren’t competing with anyone, everyone has its own market and we see different suppliers there and we have no problem with this,” Al-Attiyah said.

State-controlled QatarGas may divert LNG cargoes bound for the U.K. to Asia, the Gulf Times reported June 10, citing an interview with Chief Executive Faisal al-Suwaidi. QatarGas2 train 4, the biggest LNG unit in the world, started operation in March and is scheduled to send its first shipment to the U.K.’s South Hook terminal, the largest LNG terminal in the country, in a matter of “days,” al-Suwaidi said last month.

Doubling Output

Qatar plans to more than double output of the fuel to 77 million metric tons a year by the time it completes all 14 trains next year. All the new trains are on track to be operational by the end of next year, Al-Attiyah said.

QatarGas has partnered with Exxon Mobil Corp., Total SA, Shell and ConocoPhillips to bring three new LNG units on stream by the end of 2010. LNG is gas that’s been cooled and condensed to liquid form to allow its transportation by ship.

Al-Attiyah is on a three-day visit to the Netherlands and is meeting executives of Shell and members of the government today and tomorrow.

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

Last Updated: June 14, 2009 08:22 EDT

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