BLOOMBERG: Shell Will Build Qatar Gas Plant for World Markets (Update1): “Royal Dutch/Shell Group, Europe's second-largest oil company, will build a multibillion dollar liquefied natural gas plant in Qatar to help meet surging global demand for the fuel, said a Qatari official” (ShellNews.net) 27 Feb 05
Feb. 27 (Bloomberg) -- Royal Dutch/Shell Group, Europe's second-largest oil company, will build a multibillion dollar liquefied natural gas plant in Qatar to help meet surging global demand for the fuel, said a Qatari official.
State-run Qatar Liquefied Natural Gas Co., or QatarGas, will sign with Shell this evening for the plant, which will chill natural gas for export in tankers, said QatarGas Chairman Faisal al-Suwaidi in an interview in the capital, Doha.
The plant will produce enough gas, 7.8 million tons a year, to power almost 8 million homes. Some may be for Italy. Companies are importing gas in tankers from Africa and the Middle East as demand rises and supply falls from the North Sea and elsewhere.
For Shell, ``gaining access to Qatar's LNG is critical for their long-term business,'' said Frank Harris, vice president of global LNG at Wood Mackenzie Ltd. in Edinburgh, an energy consultant that advises oil companies.
Shell, the world's largest producer of liquefied natural gas, beat four companies including ConocoPhillips Co. for the contract in Qatar, where Exxon Mobil Corp. leads foreign investors in tapping the nation's gas reserves.
``Exxon still appears to be the favored son in Qatar, but they are giving others a seat at the table,'' Harris said.
Qatar's Goal
Shell sold just over 11 million tons of LNG last year, ahead of BP Plc, with 8.7 million tons, and Exxon Mobil, at 5.7 million tons. Shell participates in projects that account for 33 percent of 148 million tons a year of the gas that is chilled and compressed for shipment by tankers.
Qatar is building the world's biggest LNG plants and ships as it seeks to overtake Indonesia to become the top exporter of the fuel. The Persian Gulf state's LNG output will almost quadruple to 77 million tons a year by 2012 from the current 20 million tons a year, Qatari officials have said.
Qatar's offshore Persian Gulf North Dome field, the world's largest natural gas reservoir, is known to hold 900 trillion cubic feet of gas, of which about 130 trillion cubic feet is already earmarked for use in LNG projects, according to Wood Mackenzie. It takes one trillion cubic feet of gas to produce 1 million tons of LNG annually, according to the consultant.
Exxon, the world's largest publicly traded company, is leading the race to build LNG plants in Qatar. The Irving, Texas- based company, while holding stakes in five Qatari plants, lags behind Shell globally.
To contact the reporter on this story:
Andy Critchlow in Doha, Qatar on acritchlow1@bloomberg.net
To contact the editor responsible for this story:
Zimri Smith at zsmith@bloomberg.net
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