Qatar Economic Review 2006(September) - QNB

2. Qatar Liquefied Natural Gas Company II (Qatargas II)In June 2002, QP and ExxonMobil announced the setting up of a joint venture, provisionally referred toas Qatargas II, with the primary aim of supplying up to 14 mtpa of LNG to the UK market. Project costsare estimated at $12.8 billion. QP has a 70% equity stake in the venture, with ExxonMobil holding thebalance of 30%. Qatargas II was set up as part of Qatargas’ expansionary plans to add trains 4 and 5.The two new super-trains could each have a capacity as large as 7.5 mtpa, with the first train scheduledto start production in 2008 and the second to commence in 2009.In December 2004, the EPC contract for trains 4 and 5 was awarded to a joint venture of France’sTechnip and Japan’s Chiyoda. In March 2005, France’s Total acquired a 16.7% equity stake in Train 5,with an investment plan estimated at $3.5 billion. Train 5 will also have QP as a 65% equity stakeholderand ExxonMobil holding the remaining 18.3%. A $550 million loan syndication consisting of 18 bankswas signed in June 2005 for trains 4 and 5.3. Qatar Liquefied Natural Gas Company 3 (Qatargas 3)In July 2003, QP and ConocoPhillips signed a Heads of Agreement for a joint venture project referredto as Qatargas 3. The agreement outlines that the project will have an ownership structure of QP (70%)and ConocoPhillips (30%). The Qatargas 3 project envisages the construction of a LNG train with acapacity of around 7.5 mtpa, scheduled for completion by 2010, with the output mainly destined for theUS market. Project costs are estimated at around $7 billion.4. Qatar Liquefied Natural Gas Company 4 (Qatargas 4)In February 2005, QP and Shell signed a Heads of Agreement to launch Qatargas 4. The Qatargas4 project involves the construction of a 7.5 mtpa LNG train, scheduled for completion in 2011, withexports destined for North America and Europe. The Qatargas 4 joint venture will have QP holding a70% equity stake, with Shell holding the remaining 30%. Project costs are estimated at around $7 billion.In April 2006, the foundation stone for Qatargas 3 and 4 was laid by H.H the heir Apparent Sheikh Tamimbin Hamad Al-Thani.5. Ras Laffan Liquefied Natural Gas Company (RasGas)RasGas was established in 1993 as a $3.3 billion grassroots LNG and related products venture, owned byQP (63%), ExxonMobil (25%), Koras (5%), Itochu Corporation (4%), and LNG Japan Corporation (3%).Production from RasGas’ first and second LNG trains began in June 1999 and April 2000 respectively.Each of the first two trains has a capacity of just over 3.3 mtpa.RasGas began producing field condensates in April 1999, with an initial production volume of around15,000 bpd. RasGas also has a production capacity for solid sulfur of about 300 tons per day.RasGas LNG production increased by 54.7% in 2004 to reach 9.9 mt, compared to 6.4 million tons ofLNG produced in 2003. RasGas currently has a LNG production capacity of 16.0 mtpa, from 11.3 mtpaas at year-end 2004. The increase in LNG production capacity is a result of RasGas’ train 4 coming intoproduction in 2005. Contracted LNG exports are expected to reach 37.2 mt by the year 2010 (Table 3.8).Table 3.8:(a)RasGas Actual LNG Exports(In million tons per annum) 2000 2001 2002 2003 2004 2005Actual (SPA’s and Spot) 3.9 5.3 6.0 6.4 9.5 13.0(b)RasGas Anticipated LNG Exports(In million tons per annum) 2006 2007 2008 2009 2010 2011Contracted (SPA’s and HoA) 14.6 18.7 23.8 32.1 37.2 36.6Source: RasGas, QP and QNB.KEY ECONOMIC SECTORS 20