Dh46.9b Qatar LNG project gets underway

A $12.8 billion (Dh46.9 billion) project that will supply liquefied natural gas to the UK market, called Qatargas II, formally got underway yesterday, company officials said.

“Through our new ventures - Qatargas II, Qatargas 3, the refinery and other facilities - we will be able to increase our annual liquefied natural gas [LNG] capacity to over 33 million tonnes and considerably decrease unit costs,” said Faisal Al Suwaidi, Qatargas’s chief executive and vice-chairman.

The establishment of Qatargas II was an important part of an aggressive effort to increase the company’s operational capacity, he said.

“Our aim has always been to utilise the most modern technologies to maintain the company’s leading position in the LNG industry,” Al Suwaidi said.

With more than $7.6 billion (Dh27.8 billion) in international financing in place, Qatargas II involves the delivery of 15.6 million tonnes annually of LNG to the United Kingdom for 25 years, company officials said.

The first deliveries are expected in winter 2007-08.
Shaikh Tamim Bin Hamad Al Thani, Qatar’s heir apparent, laid the project’s foundation stone yesterday in the presence of Prince Andrew, the Duke of York.

The ceremony took place in the Ras Laffan industrial area.

Qatargas II is a joint venture between state-run Qatar Petroleum (QP) and ExxonMobil.

The scale of the project dwarfs any previous global LNG development, officials attending the stone laying ceremony said.

Qatargas II will further commercialise the large gas reserves of Qatar’s North Field, which has estimated recoverable natural gas resources of more than 900 trillion cubic feet (9.3 per cent of the world’s proven resources).

Qatargas II will process 30 billion cubic metres of gas per annum and will produce 15.6 million tonnes annually of LNG, 6 million tonnes of condensate and 1.7 million tonnes of propane and butane.

The project will involve the construction of two of the largest LNG liquefaction trains in the world (trains 4 and 5).

A dedicated receiving terminal is being constructed at Milford Haven in the United Kingdom. A fleet of 16 state-of-the-art carriers will be constructed to transport the LNG to the terminal.

The Milford Haven terminal will be owned and operated by South Hook LNG Terminal Ltd, a UK company owned jointly by Qatar Terminal Company Ltd (70 per cent) and ExxonMobil Qatargas II Terminal Company Ltd. (30 per cent).