QatarGas-IV.

This is a $7.5 bn integrated JV between QP (70%) and Shell (30%). It will initially have one 7.8m t/y train, also for the US market where Shell is building up large LNG import and regasification capacities. Shell is to sell a part of this LNG to Europe from 2010. QatarGas-IV's upstream element will produce 1,400 MCF/d gas from the North Field to supply both the LNG venture and its GTL project (see DT No. 10). It was announced in April 2007 that Marubeni will take a stake in QatarGas-IV in a deal to supply it with about 1m t/y from 2010.

Shell in mid-2007 said the cost of QatarGas-IV will be $8 bn, up on initial estimates of around $6 bn made in 2005. Linda Cook, head of Shell Gas & Power, then said Shell's 140,000 b/d Pearl GTL venture was going ahead despite a rise in its cost from $5 bn to $18 bn. Pearl's Phase-I would start up by end-2009. Cost inflation by February had led Qatar and ExxonMobil to scrap plans to build another large GTL plant.

In mid-2007, Shell also signed a 25-year deal with Nakilat to provide shipping services to Nakilat's newbuild fleet of 25 LNG tankers. Shell has arranged for capacity at the US Elba Island LNG terminal to receive the LNG.

Besides continuing to advance the Golden Pass regasification terminal for LNG with ConocoPhillips and ExxonMobil, Qatar in June 2007 was in talks with Shell over access to Elba Island. Qatari Minister Attiyah on June 26 said: "We are discussing with Shell Elba Island". He said the ExxonMobil/ConocoPhillips Golden Pass venture was a "very good project" for QP, set to have the same ownership in Golden Pass which is expected to have a regasification capacity of 2,000 MCF/d when it begins operating in 2009. Earlier that month, ConocoPhillips said it intended to have a stake in the Sabine, Tx., facility.

The Ras Laffan Liquefied Natural Gas Co. (RasGas) was set up in December 1992 to add two 2.5m t/y trains to the LNG complex at Ras Laffan. RasGas, an upstream/downstream venture, was then owned 70% by QP and 30% by Mobil. Ownership and planned capacity have since changed as follows:

63% by QP, which in early 1997 approved Mobil's plan to (a) raise the capacity of each train to 3.3m t/y, with two trains to be on stream in the first phase from 1999 and another two to be built later; (b) raise gas production to 1,100 MCF/d in the first phase and to 2,400 MCF/d in the final phase and raise condensate output to 50,000 b/d in the first phase and 140,000 b/d in the final phase; and (3) accept South Korean Kogas' condition to drop a floor price and get a Kogas group to join RasGas, in return for the utility's doubling of its LNG purchase to 4.8m t/y.

25% by ExxonMobil, operator of the whole upstream/downstream venture.

4% by Itochu Corp, having joined Oman LNG with a 1% stake.

3% by Nissho-Iwai which, with Itochu, joined RasGas in 1996 to help find Japanese buyers of LNG. The final accord with RasGas was signed in 1997.

5% by a South Korean group led by Kogas, which paid $50m in late 1999. Kogas is the main buyer of the LNG, taking 4.8m t/y under a 25-year sales and purchase agreement (SPA) signed at end-June 1997. The first shipment to Kogas was made in August 1999. The price is based on a formula agreed with the Japanese (see Vol. 61, Gas Market Trends 11).

The first of the two 3.3m t/y trains came on stream in late May 1999, two months ahead of schedule, although RasGas experienced leakage problems with the facility's main heat exchanger. The first shipment of LNG left Ras Laffan on June 23 to Lake Charles terminal in Louisiana under a spot deal with CMS Energy which later took other spot cargos from RasGas. The second train began deliveries in March 2000 (see gmt11QatrExpSep12-05).

RasGas-II, 70% QP and 30% ExxonMobil, was set up in May 2002 to have three 4.7m t/y trains (3&5). One went on stream in late 2003 for the Indian market under a 5m t/y contract to 2028 with Petronet LNG. The second went on stream in late 2005 to supply 1.7m t/y to Taiwan (CPC) under a 2008-33 contract, 2.5m t/y to Petronet's Kochin terminal in West India, and 3.5m t/y to Edison of Italy. For the upstream, QP and ExxonMobil signed a PSA for the US super-major to develop another portion of the North Field in the al-Khaleej Gas (AKG) project. The first phase of this went on stream in late 2003. In August 2005, AKG-2 raised production to 1,800 MCF/d. RasGas II on Aug. 7, 2005, said it had begun AKG-2 production from its offshore Wellhead Platform 5 (WHP5) at Ras Laffan's B block. Gas from WHP5 fed the 4.7m t/y Train-4. RasGas and RasGas-II by then had a combined capacity of 16.25m t/y. The EPC contractor for Train-4 was Chiyoda/Mitsui/Snamprogetti. RasGas-II has sales commitments to Endesa of Spain for 800,000 t/y for 20 years beginning in late 2005 and Edison for 4.7mn t/y for 25 years from 2007. Train-5 wents on stream in March 2007, bringing capacity at the RasGas series to 20.95m t/y, and its output is going mainly to Europe. The integrated RasGas-II JV has cost $12 bn.

In July 2007, Petronet LNG executed a term SPA for 1.25m t/y to Dahej. The capacity at Dahej by then had risen to 6.5m t/y (up 130%), through de-bottlenecking. This was to merge into the expanded capacity of Dahej to 10m t/y, to be commissioned between July 2008 and January 2009. The additional 2.5m t/y under the existing SPA with RasGas is to begin in 2009. This capacity, expandable by 2.5m t/y, will be commissioned by end-2010. India's state-owned Oil and Natural Gas Corp, Indian Oil Corp, Bharat Petroleum Corp and GAIL together own 50% of Petronet. Gaz de France has 10%. The remaining 40% is held by public and institutional investors.

RasGas-II and EdF, through its 100% unit EdF Trading, in June 2007 signed a 4.5-year supply agreement with flexibility for interruptible deliveries of up to 3.4m t/y of LNG. The LNG will be delivered ex-ship at the Zeebrugge terminal in Belgium.

RasGas III, 70% QP and 30% ExxonMobil, is a $12 bn integrated JV to have two 7.8m t/y trains built to supply the US market. Train-6 is to be on stream in 2008 and Train-7 is to be ready in 2009. As in the QatarGas-II, III and IV ventures, QP will be ExxonMobil's partner in the US LNG/regasification terminals for RasGas-II and RasGas-III.

Together with debottlenecking the three RasGas ventures will have a total capacity of 36.55m t/y by 2010 but will be able to produce over 41.5m t/y. The four QatarGas ventures will also be able to produce over 43m t/y. So Qatar's total will be 84.5m t/y.

Qatar Gas Transport Co. (Nakilat), the world's largest shipper of LNG, has ordered 54 tankers to cope with growing global demand. Set up in June 2004, it will directly or indirectly be involved with up to 100 LNG tankers of various sizes to carry the exports of the QatarGas and RasGas sets of ventures. It will have 40 ships for other purposes.

So popular Nakilat was on the Doha Securities Market (DSM) in January 2005 that its IPO ended in mid-February being nine and half times over-subscribed at $660m. Nakilat's ambitions extend far beyond the LNG market. It is to become a major transporter of LPG, sulphur and condensate and the owner of one of the region's biggest dry dock by 2010. Its tanker orders are keeping South Korean shipyards busy for years.

Nakilat in March 2007 signed an agreement with Keppel O&M to jointly develop a world-class $450m shipyard at Ras Laffan to begin operation in 2010. Nakilat CEO Muhammad A. Ghannam then said: "Our vision is for the new shipyard to become a centre of excellence for the repair and maintenance of LNG carriers, thereby securing a strategically important link in the supply chain of natural gas from wellhead to consumer". Nakilat and Keppel were to form an 80/20 JV to manage the design, construction and operation of the 43-hectare shipyard, which will be built on reclaimed land. The name of the JV, Nakilat-Keppel Offshore & Marine Ltd, will repair and maintain very large LNG carriers and a wide range of other vessels, and convert tankers to Floating Production Storage & Offloading systems (FPSO) and Floating Storage & Offloading (FSO) systems. QP will fund the land reclamation and construction of the yard's infrastructure. QP will lease the infrastructure to the JV. The JV will fund the shipyard's mobile equipment, such as the floating dock, cranes and workshop machinery, and provide cash for operations. The shipyard can be expanded for construction of specialised small ships (such as offshore supply vessels), and fabrication of structures for the offshore oil and gas industry, and of components for land-based petrochemical and industrial plant. The facility will also provide life-cycle support in all the markets it serves.

Samsung Heavy Industries, the world's second-largest shipyard, in March 2007 began building the world's biggest LNG carrier for RasGas - a 266,000 CM tanker, about twice the size of a typical LNG ship - on Koje Island in South Korea. It will deliver the vessel by August 2008. There are 45 LNG tankers of 200,000 CM on order at Korean shipyards for Qatari gas projects. These orders include tankers of 209,000 CM known as the Q-flex, and 266,000 CM (Q-max). Each Q-max carrier costs about $300m.

Pipeline Gas Exports: A 364-km marine pipeline built from Qatar to Abu Dhabi and completed in late 2006 for the $5 bn integrated gas E&P/downstream Dolphin Energy (DEL) JV has been supplying gas to the UAE on a limited scale from March 2007. But production of DEL's own system began in June. For this, DEL has developed a North Field block under a PSA. A DEL gas supply contract signed with Dubai's Dusup in May brought total committed deliveries secured by Dolphin to almost 2,000 MCF/d, which represents the initial capacity of the Qatar/UAE pipeline. The other two major offtakers are Abu Dhabi Water & Electricity Company (ADWEC) and Union Water & Electricity Co., both of which signed up in October 2003. DEL is to have a short-term contract with Ras al-Khaimah for 40 MCF/d. Recently it signed a contract with Oman Oil Co. for 200 MCF/d to be delivered from 2008.

The DEL line will have a final capacity of 3,200 MCF/d. DEL is 51% owned by Abu Dhabi's Mubadala Development Co., with each of Total and Occidental Petroleum holding 24.5%. Riyadh objections on use of a disputed territory along the pipeline's route have been resolved by Abu Dhabi and Saudi officials. Deliveries from DEL's block to the UAE began in July. DEL in August loaded its first cargo of 500,000 barrels of condensate.