Daily Telegraph (UK: Shell signs up for world's biggest gas field in Qatar: “The agreement will further strengthen the Anglo-Dutch energy giant's influence in the global natural gas market, of which it controls 30pc.” (ShellNews.net) 28 Feb 05
By Aaron Patrick (Filed: 28/02/2005)
Shell reached an agreement yesterday with the Middle Eastern state of Qatar to build a $6billion (£3.1billion) plant in the world's largest natural gas field.
The agreement will further strengthen the Anglo-Dutch energy giant's influence in the global natural gas market, of which it controls 30pc. Production at the field, known as Qatargas-4, is scheduled to begin between 2010 and 2012 and last 25 years.
Shell said it would be its largest liquefied natural gas processing plant. The company will be responsible for transporting the gas and finding buyers for it.
The company will fund 30pc of the cost of a drilling platform, pipes and a plant to covert 7.8m tonnes of gas a year into liquid form for transport to Europe and North America. Qatar Petroleum, which is owned by the Qatar government, will cover the rest of the cost as it aims to become the world's top liquefied natural gas producer by 2011.
It may be the second large gas deal signed by Qatar in two days. Yesterday it was reported that French producer Total will sign a $3billion agreement with Qatar Petroleum today for a second field.
Under the second project, Qatargas-2, Total, US producer ExxonMobile and Qatar Petroleum will provide Britain with 16m tonnes of gas a year from 2007 for 25 years. Natural gas demand is forecast to grow at 6-8pc, although in the short term experts believe the growth rate will be as high as 14pc. Analysts believe demand for oil will grow about 3pc a year.
"Natural gas is seen as more environmentally preferred than oil and coal and as the cost of production has come down because of lower transport costs, demand is increasing," said Shell's executive director of oil and gas, Linda Cook, who signed the agreement in Doha.
Once extracted, natural gas is cooled to -160°, at which point it becomes a liquid, occupying less than 1pc of the space in its gaseous form, making it cheap to transport.