Qatar halts plans

The world's largest producer of liquefied natural gas, Qatar, has halted plans to build any new gas-to-liquid plants.

Qatar and companies including Exxon Mobil Corp. and Royal Dutch Shell PLC are building the world's largest gas-to-liquids plant and 14 LNG production units, the final three of which will start by the end of 2010. Producers are waiting for Qatar to decide on expanding development of its North Field, which is the world's biggest non-associated gas deposit, to boost output further.

In 2005, Qatar stopped all projects in its North Field, the world's biggest gas deposit, as it carried out studies on the reservoir, Arabian Business states. The announcement that there are no plans to build more plants means that if the ban is lifted, any additional gas output will be used domestically or to expand existing projects.

Expansion

Saad Al Kaabi, the Director of oil and gas ventures at State-owned Qatar Petroleum says that upgrading existing units will be the cheapest and most effective way to expand.

"If we go for grass roots projects, we'll have to set up new operating projects, we'll have to factor in new costs," he added.

Samuel Ciszuk, an analyst at IHS Global Insight said in a telephone interview: "It's not happy news. Qatar has been one of the few places where international oil companies have had access to such huge reserves. It has offered lucrative investments for foreign companies."

Qatar opened its deposits to international companies less than two decades ago, with its first shipment of LNG cargo going out in 1996 in a joint venture with Exxon.

Andrew Person, an analyst at Wood Mackenzie endorsed Qatar's decision, saying, "In terms of Qatar preserving its resources, it's a sensible decision."

He went on to explain that the real focus of the global LNG business is currently in Australia and Asia.

Qatar is seeking to increase LNG output to 77 million tons a year by the end of 2010 from 54 million tons now, Chron Business states.

"Twelve million tons we could add easily through revamp and de-bottleneck," Energy Minister Abdullah bin Hamad al- Attiyah said.

 

 

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