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Qatar: $8.6bn Barzan project deal signed

DOHA: Qatar Petroleum ( QP ) and ExxonMobil Barzan Limited, a subsidiary of ExxonMobil Corporation , yesterday signed a joint venture agreement and a development and fiscal agreement for the Barzan Gas Project, which is to cost an estimated QR31bn ($8.6bn). QP has a 93-percent share and ExxonMobil seven percent in the venture.

The Barzan project, to be located in Ras Laffan Industrial City, will be operated by RasGas Company Limited to produce and process gas from Qatar's North Field to supply gas to power stations and industries in Qatar, ethane to the local petrochemicals industry, and associated liquid hydrocarbons for sale in local and international markets. The project is expected to supply 1.4 billion cubic feet per day of gas with the first gas flow planned for 2014.

Currently, Qatar is producing about 2.8 billion cubic feet of gas a day for local consumption and this is expected to reach about four billion standard cubic feet a day by 2015.

The agreements were signed here yesterday at a ceremony by the Deputy Premier and Minister of Energy and Industry, H E Abdullah bin Hamad Al Attiyah and ExxonMobil Corporation Senior Vice President Andrew P Swiger.

The letters of award for the onshore and the offshore engineering, procurement and construction contracts have been awarded to JGC of Japan and Hyundai Heavy Industries of South Korea, respectively, who won the contracts in competitive bidding.

All mega projects to be completed in 10 years: Attiyah

Speaking on the occasion, Al Attiyah said the project would play a critical and strategic role in sustaining the high growth rate of the Qatari economy.

"The Barzan project is scheduled to come on stream in 2014, just in time to meet the accelerating local gas demand," said Al Attiyah. "A major portion of the gas will be used by the power and water generation sector. When you convert all the products from this project into barrel of oil equivalent it will produce more than 300,000 barrels of oil equivalent per day which is very significant."

However, he said that with the completion of this phase of the planned North Field development, "it is only prudent that the moratorium on further development of the field remain in place until after 2014 as announced previously, in order to protect our North Field reservoirs and support the long-term sustainable development of the state of Qatar."

Several mega infrastructure projects have recently been started in Qatar, and will be completed within the next 10 years. These include the new airport and sea port, hospitality ventures, a railway project, several real estate ventures and the hosting of the 2022 football World Cup.

"All these projects will increase the demand for gas. Therefore, it is only prudent that we should be laying the foundation of the Barzan project now," said Al Attiyah.

"When Barzan starts production we will have achieved our target of producing plateau of 23 billion standard cubic feet of gas per day from the North Field; which is equal to producing 4.2 million barrels of oil equivalent per day from this single field, and more than five million barrels of oil equivalent when you add the crude oil production, which makes Qatar one of the largest net oil and gas exporters in the world, well into the future," he said.

© The Peninsula 2011