With many Middle Eastern gas projects either stalled or behind schedule, Qatar is bucking the trend by going ahead with a wide range of projects aimed at monetizing its enormous gas reserves. Qatar’s proven reserves of 910 tn cubic feet (tcf) are the world’s third-largest, after Russia (1,679 tcf) and Iran (939 tcf), according to OET Annual Statistical Review of May 2003. Despite its huge endowment of reserves, though, the Middle East lags behind several other areas in developing its production: especially production for export. Iran, in particular, has been slow to exploit its abundant resources (see ‘Focus’, June 2003), leaving Qatar as the most active player in the region.
Qatar is the world’s fourth-largest exporter of liquefied natural gas (LNG), with a total last year of 1.9 bn cfd, of which 85% went to Japan and the Republic of Korea. The emirate has ambitious plans to raise this total and is planning a series of new export trains designed to raise export capacity to about 7 bn cfd by 2010, which would make it the largest LNG exporter in the world (see Table B).
Table B |
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Qatar: LNG export capacity, 2003–10 |
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Terminal |
Capacity (bn cfd) | ||
| 2003 | 2005 | 2010 | |
| Qatargas I | |||
| Trains 1–3 | 1.1 | 1.2 | 1.3 |
| Train 4 | — | 0.3 | 0.7 |
| Qatargas II | |||
| Trains 1–2 | — | — | 1.9 |
| Qatargas III | |||
| Trains 1–2 | — | — | 1.0 |
| RasGas | |||
| Trains 1–2 | 0.9 | 0.9 | 0.9 |
| Trains 3–4 | — | 0.9 | 1.2 |
| Total | 2.0 | 3.3 | 7.0 |
LNG export plans are changing all the time, depending on the progress of contract negotiations between the companies proposing to develop the new export trains and potential customers. ConocoPhillips, for example, recently announced plans to take 1 bn cfd of LNG to the USA from 2008 or 2009. ConocoPhillips is developing Qatargas III. ExxonMobil and Total have also been trying to sign up customers in the USA, which is seen as a major growth market for gas (see ‘Focus’). There are also plans to sell more Qatari gas to the UK and Continental Europe (see ‘Focus’, August 2003).
Many of the new export trains will be amongst the largest in the world — around 1 bn cfd in capacity — and a new generation of large LNG carriers is being developed to transport the gas. If all plans currently under discussion were to be developed, Qatar might find itself with an export capacity of more than 10 bn cfd some time after 2010. The actual level of capacity will be governed by the amount of gas that can be sold under long-term contracts. Such offtake agreements are necessary in order to enable the financing of the export and receiving terminals and the LNG carriers required to carry out the trade. Some contract negotiations are still incomplete: thus the actual capacity available in future may be different from the levels actually planned.
The Qataris are not only proposing to export LNG: there are also plans to supply neighbouring countries with gas by pipeline and, ultimately, for Qatar to be the hub of a gas grid supplying much of the Arabian peninsula. Some 2 bn cfd is being earmarked for the UAE via a new pipeline to be commissioned in 2006. A further 1.8 bn cfd has been set aside for Kuwait and Bahrain via another new export pipeline, also due on-stream in 2006. This latter plan, however, is subject to agreement between Qatar and Saudi Arabia on the passage of the pipeline through Saudi territorial waters. Political objections from Riyadh may delay the project. There are even plans to pipe gas as far as Pakistan; but this scheme is still a long way off.
Qatar also has ambitious plans to make use of its gas at home. Gas will be used to fuel new electricity generating and desalination plants and for a planned aluminium smelter. Some of Qatar’s gas may even be exported as electricity. There are plans to build new gas-fired stations to supply power to a proposed grid serving the Arabian peninsula and, ultimately, other parts of the Middle East. Gas liquids will be recovered from some gas streams either for export or as feedstocks for the domestic petrochemical industry. Under a deal agreed recently, the UK’s BOC and France’s Air Liquide will recover helium from LNG plants belonging to the Qatargas and RasGas consortia. Qatar will thus become the first Gulf state to produce helium and, once the plant is open in about 2005, the fourth-largest producer of the gas in the world.
There are still further plans to produce hydrocarbon liquids from natural gas using gas-to-liquids (GTL) processes. Such plants are designed to produce feedstocks and blendstocks such as naphtha and gasoil, as well as solvents and waxes. Liquids produced in GTL plants are expected to command a premium in oil markets owing to their high quality and low sulphur content. Five GTL projects are under discussion, ranging in size from 34,000 bpd to 300,000 bpd. One of them may be used to produce methanol, in addition to the more usual naphtha and gasoil (see Table C).
Table C |
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Qatar: GPL plants under discussion |
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Company* |
Plant capacity (bpd) |
Status |
| Sasol | 34 000 | Construction contract awarded |
| ExxonMobil | 110 000 | LOI signed |
| Shell | 57 000–110,000 | LOI signed |
| ConocoPhillips | 50 000–300,000 | Proposal |
| Marathon | 80,000 | Proposal |
| * Qatar Petroleum is the local partner in each case | ||
| LOI: Letter of Intent | ||
© Blackwell Publishing Ltd, 2003