QatarGas II LNG Plant To Be Awarded Shortly; RasGas III Tender Will Follow.

The EPC contract for LNG Trains 4&5 of the Qatar Liquefied Gas Company-II (QatarGas-II) venture is to be awarded before end-2004, with first gas production for this due in late 2007. Each of these trains will have a capacity of 7.8 million tons/year, the biggest in the world, with the first LNG shipment to the British market due before end-2007.

QatarGas-II, an $11,000m integrated 70:30 Qatar Petroleum (QP)/ExxonMobil venture, is geared mostly for the UK and the fuel from a regasification terminal at Milford Haven will be sold partly to other European markets. The $725-750m EPC contract for the terminal was awarded on Nov. 10 to Chicago Bridge & Iron and this should be commissioned in the fourth quarter of 2007 (see gmt20cNov22-04).

Competing for the EPC contract for Trains 4&5, worth up to $2 bn, are two consortia: Kellogg Brown & Root (KBR) with JGC Corp.; and Chiyoda Corp. with Technip. The contractor will first build Train 4, to be on stream in late 2007.

For its project QatarGas-II has already received financing commitments worth $3,600m, the biggest commercial facility ever secured in the Middle East. QP and its partners in LNG and other ventures enjoy high rating and get excellent rates from commercial banks. Qatar, with an A+ rating from S&P, hopes it will soon get an AA - the highest rating in the region.

The Ras Laffan Liquefied Natural Gas Co.-III (RasGas-III), another $11,000m integrated 70:30 QP/ExxonMobil venture, is in early January to tender its LNG Trains 6&7. With each train to have a capacity of 7.8m t/y, RasGas-III is for the US market. Train 6 must be completed in late 2008. Chiyoda Corp. has just completed the FEED work for the two trains. McDermott is the platform contractor for RasGas-111's upstream element.

The RasGas ventures have had an impressive record in project financing. Its second bond last spring was over-subscribed four times. RasGas-II has even been able to finance some of its new capacity from the partners' own cash resources.

RasGas Chairman and Finance Minister Yousef Hussain Kamal was on Nov. 19 quoted by MEED as say-ing: "Train 3 has been 100% financed internally". He said 80% finance for Train 4 was provided internally and the company secured 25% of Train 5's requirements out of its own funds. On Train 6, he said, "we have just signed the first cash call from shareholders".

RasGas will have a 4.8m t/y train on stream in April 2005, and this will be able to produce more than 5m t/y. This and the earlier trains are for the Indian and other Asian markets, with some volumes to go to the European markets (see background in gmt18cNov1-04).

Kamal said Qatar and its partners are "almost committed for 77m t/y of LNG which should be on stream before end-2012". These will require 57 LNG tankers of various sizes, including giant vessel with a capacity of 250,000 cm to meet its commitments to supply gas to Europe and the US. The tankers will be owned and run by the recently established Qatar Gas Transport Co. (Q-Gas), which will over 50% of its share capital to private investors in mid-January. The IPO is expected to be over-subscribed several times.

QatarGas-III, a 70:30 QP/ConocoPhillips venture, will be for the US market. Its first 7.8m t/y train should be on stream by 2009. Its second train of the same size would be on stream by 2011/12.

According to Qatar's Minister of Energy and Industry, Shaikh Abdullah Bin Hamad Al-Attiyah who is also a second deputy prime minister and chairman of QP, the 77m t/y of LNG exports will be almost evenly distributed to Asia, Europe and the US. "We will be the first country in the world to sell LNG to all three regions", he says.