Joined: Oct 23, 2004 Posts: 5900 Location: New Jersey
Posted: Wed Feb 21, 2007 10:57 am Post subject: Major Qatar Gas to Liquid Project Cancelled
While it is not completely clear why this $7 billion project planned over a decade was cancelled, it appears to have much to do with the desire of Qatar to use its natural gas for domestic markets. Albeit the fact the costs for the project were recently revised upwards to $18 billion probably also played a part in the decision.
Recently a senior Exxon official said he expected to have a joint investment decision with Qatar Petroleum on the GTL project by mid-year. Exxon now gets just a domestic Qatari scheme as a consolation prize. Exxon had been able to significantly increase its proven reserves (for SEC accounting purposes) in recent years due to its Qatar projects.
This is another example that as PO approaches, as rapidly escalating costs push EROEI steadily lower worldwide, and as domestic demand increases within oil/NG exporting countries, energy exports will start to be reduced before PO arrives.
Quote:
Exxon to Abandon a Big Investment in Qatar
CLIFFORD KRAUSS
Published February 21, 2007
HOUSTON, Feb. 20 — Exxon Mobil announced on Tuesday that it would abandon one of its biggest investments ever, a project with Qatar’s state-run oil and gas company to produce clean-burning diesel from natural gas.
Instead, Exxon Mobil said that it could concentrate on a new gas drilling project in the emirate’s rich Barzan field, which is close to the site of the gas-to-liquid project. The Barzan project will initially produce 1.5 billion cubic feet of gas a day and eventually much more for the fast-growing Qatar domestic market in 2012.
The Exxon project is apparently a victim of those costs, although the company would not explicitly say so.
“This decision to not progress with G.T.L. is in line with our focus on maximizing the value of resources for both our host government as well as our shareholders,” said Jeanne Miller, an Exxon spokeswoman, using the initials for gas to liquid.
Ms. Miller said the gas-to-liquid project had been slated to cost $7 billion three years ago, “and we have not discussed project costs since then.” She added, “I’m not denying costs were a factor” for the change in company strategy in Qatar.
Published: Wednesday, 21 February, 2007, 10:57 AM Doha Time
By Pratap John
QATAR Petroleum (QP) has launched the Barzan Gas Project in association with ExxonMobil, which will produce some 1.5bn cubic feet a day of gas from the North Field.
The project is expected to start up in 2012, the Second Deputy Premier and Minister of Energy and Industry, HE Abdullah bin Hamad al-Attiyah, said in Doha last night.
Although al-Attiyah said the total investment in the Barzan project was “yet to be worked out”, it would be a “significant” one designed to meet the soaring local demand for gas, especially from utilities and the industry.
He said the local demand was expected to shoot up to 4.25bn cubic feet a day by 2012.
The Barzan project will provide about 1.5bn cubic feet a day of pipeline gas.
The balance will be met by existing Al Khaleej Gas – 1 (AKG-1) with a daily capacity of 750mn cubic feet and the North Field Alpha (800mn cubic feet).
AKG expansion, Al Khaleej Gas - 2, slated for a 2009 start up, will provide some 1.2bn cubic feet a day.
“We need to step up natural gas production to meet the needs of the local industry,” the minister said.
“Because of Qatar’s rapid economic expansion the demand for pipeline gas is soaring.”
The QR5.5bn Al Khaleej Gas–1 was completed in November 2005. A Qatar-ExxonMobil venture, the project is already supplying gas to Oryx GTL, and Ras Laffan Power Plant and other domestic consumers.
The North Field Alpha is wholly operated by QP which developed it in 1991 to utilise gas from the North Field, the largest single non-associated gas field in the world.
The QR11bn Al Khaleej Gas-2 was launched in July last year under a development and production sharing agreement between Qatar and ExxonMobil Middle East Gas Marketing Limited.
Al-Attiyah told Gulf Times that ExxonMobil Middle East Gas Marketing would be offered a 10% stake in the Barzan project. The remainder will be held by QP.
“We have agreed to form a joint venture to oversee the project development. Now we have decided to launch the project. The heads of agreement and other formalities will be carried out at the appropriate time. But we expect the first gas from BGP in 2012,” he said.
Al-Attiyah said the Barzan project was launched in line with the policies being laid by HH the Emir Sheikh Hamad bin Khalifa al-Thani to provide a supporting platform for Qatar’s industries.
ExxonMobil (Qatar) president Alex Dodds said: “We understand the Barzan project is a priority for Qatar. We are pleased to have been the only international oil company selected to participate in it.”
Senior QP and ExxonMobil executives were present at the function held to launch the Barzan project at the Four Seasons.
Posted: Wed Feb 21, 2007 12:27 pm Post subject: Re: Major Qatar Gas to Liquid Project Cancelled
This is an interesting development of events.
There are 7 LNG trains in operation. A 8th LNG train is on schedule to go live this summer. A 9th and 10th LNG trains are in development. With domestic demand soaring, Qatar had to cancel the GTL project with Exxon. Not only that, they are green lighting several new fields. The North Field was supposed to be able to provide enough gas to supply LNG trains 1-12 plus 2 GTL plants. Are they finding issues with gas production???
Did they cancel the 2 LNG trains that were part of the GTL plan?
Okay, I was wrong. The 2 LNG trains will still be build.
This means there will be 14 LNG trains.
Also, I did not know there was already a GTL plant in operation by Sasol, so with Shell completing their GTL, we will have two GTL plants in operation.
Exxon is trading GTL for more field development work, but this development work is for domestic consumption only, meaning low margins.
Joined: Oct 23, 2004 Posts: 5900 Location: New Jersey
Posted: Wed Feb 21, 2007 4:11 pm Post subject: Re: Major Qatar Gas to Liquid Project Cancelled
Thanks nth for your comments.
In a future cold mid-winter in early 2012, some LNG shipments from Qatar that we previously thought might show up in the northeast US will instead be powering some colossal hotel or air conditioned shopping mall in Qatar.
Of course, it is their right to use their resources as they please (barring the effects of pollution). No one within the US would ever question the US’s right to use its many resources. However I don’t think even by then most Americans will understand why ‘their’ energy is being consumed in the Mideast. _________________ It's already over, now it's just a matter of adjusting.
Joined: Feb 20, 2005 Posts: 2788 Location: Uppsala, Sweden
Posted: Wed Feb 21, 2007 4:47 pm Post subject: Re: Major Qatar Gas to Liquid Project Cancelled
18 billion dollars. With that kind of money could build, well, almost 10.000 MW of nuclear capacity. Or at least 9000 MW. That's all the nuclear capacity in this entire country, feeding almost 50 % of one of the highest per capita power consumptions in the world.
18 billion dollars. Wow. _________________ Peak oil is not an energy crisis. It is a liquid fuel crisis.
Posted: Wed Feb 21, 2007 5:00 pm Post subject: Re: Major Qatar Gas to Liquid Project Cancelled
Starvid wrote:
18 billion dollars. With that kind of money could build, well, almost 10.000 MW of nuclear capacity. Or at least 9000 MW. That's all the nuclear capacity in this entire country, feeding almost 50 % of one of the highest per capita power consumptions in the world.
18 billion dollars. Wow.
Which country are you refering to when you say "50%"?
Posted: Tue Feb 27, 2007 9:21 am Post subject: Re: Major Qatar Gas to Liquid Project Cancelled
Hello! Nice Forum I must say, I've been reading for some time about Gas and LNG and finally I joint you all on this forum!
So if I understaind it good there will be 14 trains in total in Qatar? Does somebody know to where the LNG would go of the projects in construction? Japan - South Korea-US or they didn't sign the contracts jet.
Posted: Tue Feb 27, 2007 9:42 am Post subject: Re: Major Qatar Gas to Liquid Project Cancelled
DiterDV wrote:
So if I understaind it good there will be 14 trains in total in Qatar? Does somebody know to where the LNG would go of the projects in construction? Japan - South Korea-US or they didn't sign the contracts jet.
All trains are spoken for. Asia, Europe, US in that order.
There are plans for more, but until construction begin, I won't count it.
Posted: Tue Feb 27, 2007 1:07 pm Post subject: Re: Major Qatar Gas to Liquid Project Cancelled
nth wrote:
DiterDV wrote:
So if I understaind it good there will be 14 trains in total in Qatar? Does somebody know to where the LNG would go of the projects in construction? Japan - South Korea-US or they didn't sign the contracts jet.
All trains are spoken for. Asia, Europe, US in that order.
There are plans for more, but until construction begin, I won't count it.
Japan and South Korea are the big offtakers, regarding LNG. Does somebody has access to a database of the LNG liquefaction capacity (some study like the Petroleum Economist of Poten&Partners)? Because it is really hard to find all the data on the different terminals. Other info is always welcome!
Posted: Tue Feb 27, 2007 1:33 pm Post subject: Re: Major Qatar Gas to Liquid Project Cancelled
Quote:
Japan and South Korea are the big offtakers, regarding LNG. Does somebody has access to a database of the LNG liquefaction capacity (some study like the Petroleum Economist of Poten&Partners)? Because it is really hard to find all the data on the different terminals. Other info is always welcome!
What kind of data you want?
If you want a list of all LNG, then that is too much work, but specific LNG per country that I can probably get.
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