Qatar inks pacts with ExxonMobil, Shell for LNG, GTL megaprojects   
By Oil and Gas Journal editors 

HOUSTON, Oct. 21 -- Qatar Petroleum (QP) has signed separate 
agreements in the past week with two supermajors that would result in the 
world's largest gas-to-liquids project in Qatar as well as further expansion 
of LNG export capacity in the tiny Persian Gulf nation. 
The LNG exports would be shipped to a US regasification terminal—at a 
location still to be decided—that sponsors say would be part of the largest 
US LNG import supply project. 

Both projects in Qatar center on new development and processing of 
natural gas from its supergiant North field, the world's largest offshore 
nonassociated gas field. 

QP signed a heads-of-agreement in Doha Monday with Qatar Shell GTL, 
a unit of Royal Dutch/Shell Group, to develop a block in North field to 
produce 1.6 bcfd of gas over the life of the project and to construct what is 
being hailed as the world's largest GTL plant at Ras Laffan. 
QP also signed an HOA in Doha Oct. 16 to supply ExxonMobil Corp. with 
more than 15 million tonnes/year of LNG to be delivered to the US over a 
period of 25 years. 

GTL project 
Shell said it would invest $5 billion to develop the upstream gas and 
liquids facilities, which would include platforms and multiphase pipelines, 
and the GTL plant, which would produce naphtha and transport fuels, 
along with some normal paraffins, lubricant base oils, and associated 
condensate and liquefied petroleum gas. 

The plant will be developed in two phases, Shell said, with two 70,000 b/d 
trains. The first is scheduled to be operational in 2008-09 and the second 
train by 2010-11. 

"We shouldn't underestimate the challenges of a project of this size—our 
140,000 b/d Qatar GTL plant will be the size of some of the world's largest 
refineries," said Royal Dutch/Shell Chairman Phillip Watts. He said the 
plant would be four times the size of the 34,000 b/d plant that Sasol 
agreed last year to build, which he called the "first step" in developing a 
new industry for Qatar. 

"The signing of the [HOA] for this first world-scale project is an important 
milestone in establishing Qatar as the GTL capital of the world and is 
supporting the economic development of Qatar. . . ," said Qatari Oil 
Minister Abdullah Al-Attiyah. 

Malcolm Brinded, managing director of Royal Dutch/Shell Group and CEO 
of Shell Gas & Power, added: "This milestone highlights Shell's 
commitment to support the long-term aspirations of Qatar. The project will 
develop significant gas and condensate reserves, deliver ultraclean 
products, and is economically robust. As such it heralds the dawn of a 
new industry." 

LNG project 
The agreement with ExxonMobil includes development of two large LNG 
trains with a combined capacity of 15.6 million tonnes/year of LNG (2 bcfd 
of natural gas) by Ras Laffan Liquefied Natural Gas Co. Ltd. II (RasGas 
II), a joint venture of QP and ExxonMobil affiliate ExxonMobil RasGas Inc. 
ExxonMobil currently is evaluating several locations in the US—one of 
which it will use to develop a receiving terminal—and the company said it 
expects to initiate the permitting process in the fourth quarter of this year. 
Deliveries are expected to begin in 2008-09. 

Total estimated investment, including LNG carriers, will be about $12 
billion. QP will have a 70% equity interest in the project and ExxonMobil 
30%. 

"This huge, world-scale project, with many technological firsts for the US 
market, has been under consideration for more than 1 year," said 
ExxonMobil Executive Vice-Pres. Harry Longwell, who said the company 
intends to "continue to explore other business opportunities" with Qatar 
and QP. 

Youssef Kamal, Qatar's minister of finance and chairman of RasGas said, 
"This is a giant step for RasGas, and it promises the conclusion of the 
largest agreement since the company's inception. It is undoubtedly a giant 
boost to our efforts to become an industry pacesetter." 

On Oct. 17, RasGas II reported it had chartered two more LNG carriers for 
a 25 year period (OGJ Online, Oct. 17, 2003) to add to its LNG export 
fleet. 

LNG projects recap 
The two new trains will represent the fifth and sixth such LNG units to be 
developed at Ras Laffan by RasGas joint ventures. 

RasGas II currently is building two 4.8 million tonne/year trains at the Ras 
Laffan Industrial City LNG complex in Qatar. RasGas II is owned 70% by 
QP and 30% by ExxonMobil. These two units are slated for start-up in 
2004-05. 

They will join two existing trains operated by another joint venture led by 
QP and ExxonMobil (RasGas) that produce more than 6 million 
tonnes/year of LNG. These two trains started up in 2001. Other interest 
owners are Korea Gas Corp. 5%, Itochu Corp. 4%, and Nissho Iwai Corp. 
3%. 

Another, unrelated joint venture, Qatargas, operates three LNG trains at 
Ras Laffan with a combined capacity of 7 million tonnes/year that is being 
debottlenecked to 9 million tonnes/year. These units too are fed by North 
field, which holds more than 900 tcf of dry gas reserves. 

Qatargas is a JV of QP 65%, ExxonMobil and Total SA 10% each, and 
Mitsui & Co. and Marubeni Corp. 7.5% each. Qatargas started up in 1984. 
Yet another JV centered on Qatari LNG was announced this summer 
when QP and ConocoPhillips signed an HOA calling for the establishment 
of a JV to develop still more North field gas in support of another LNG 
train at Ras Laffan (OGJ Online, July 11, 2003). 

The integrated project, Qatargas 3, will yield 7.5 million tonnes/year of 
LNG that ConocoPhillips will market in the US. No US LNG receiving 
terminal was mentioned in the Qatargas 3 announcement, which called for 
start-up in 2008-09. 

In addition to the RasGas and Qatargas development areas of North field, 
QP operates the original development area, North Field Alpha.