ExxonMobil and Qatar Petroleum in LNG supply deal — largest
US agreement to date
Posted: 18 October 2003
Exxon Mobil Corporation and Qatar Petroleum signed a Heads of Agreement
(HOA) to supply Liquefied Natural Gas (LNG) from Qatar to the United
States for an expected period of 25 years.
The announcement was made by His Excellency Abdullah bin Hamad
Al-Attiyah, Qatar Second Deputy Premier and Minister of Energy and
Industry, and by Harry Longwell, Director and Executive Vice President,
Exxon Mobil Corporation, at a signing ceremony in Doha.
The HOA covers the development of two large LNG trains with combined
capacity of 15.6 million tons per annum (mta) of LNG, or about 2
billion cubic feet per day, by Ras Laffan Liquefied Natural Gas
Company Limited II (RasGas II). The feed gas for these trains will
be sourced from Qatar's giant North Field, which has proven natural
gas reserves in excess of 900 trillion cubic feet (tcf). More than
26 tcf of the reserve will be dedicated to this project. Downstream
of the plants the parties will be working to acquire necessary transportation
capacity and developing regasification capacity in the United States.
Total estimated investment including ships is about $12 billion.
The project is the largest LNG import project that has been announced
for supplying natural gas to the United States, and makes Qatar
Petroleum and ExxonMobil leaders in supplying the important U.S.
natural gas market. Delivery of LNG to the United States is projected
to begin in 2008/2009, and will likely extend for more than 25 years.
Several locations are currently under evaluation for developing
a receiving terminal, and we expect the permitting process will
be initiated in the fourth quarter of 2003.
The LNG trains will be built at Ras Laffan Industrial City in Qatar
by RasGas II, a joint venture between Qatar Petroleum and ExxonMobil,
operating since 2001. Two existing trains currently produce more
than 6 mta of LNG and two additional trains of 4.8 mta each are
under construction. Qatar Petroleum will have a 70 percent equity
interest in the project, and ExxonMobil 30 percent.
In his statement at the HOA signing ceremony, Minister Al-Attiyah
said, "This important agreement to supply LNG to the U.S. markets
is a major achievement for the State of Qatar and highlights another
successful joint effort between Qatar Petroleum and ExxonMobil.
The strength of Qatar Petroleum and ExxonMobil establishes an ideal
partnership to meet the challenge of supplying the growing energy
requirements of the United States. This long-term LNG supply agreement
builds on Qatar's valued and strong relationship with the U.S."
Harry Longwell said, "The National Petroleum Council in the
U.S. just published the results of a study that indicates the United
States will need to import more gas to meet expected future demand
and this project will be a valuable contribution to those balances.
This huge, world-scale project, with many technological firsts for
the U.S. market, has been under consideration for more than one
year. The project demonstrates the impressive capabilities of the
Qatar Petroleum - ExxonMobil partnership. We are immensely proud
of this partnership, and we will continue to explore other business
opportunities with Qatar Petroleum and the State of Qatar."
Qatar's Minister of Finance and RasGas Chairman, His Excellency
Youssef Kamal, further stated, "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 pace setter."
For more information see www.exxonmobil.com
Posted by Richard Price,
Editor Pipeline Magazine
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