Qatar contracts for $4B twin LNG plants

Twin plants capable of sending out 7.8 million tonnes of liquefied natural gas daily will be built in Qatar under joint venture arrangements involving ConocoPhillips and Royal Dutch Shell PLC.

The big multinationals are partnering with government-controlled Qatar Petroleum in the plants, which will be built by Chiyoda Corp. and Technip France Joint Venture, according to a Dec. 21 announcement by ConocoPhillips.

Japanese press reports put the value of the onshore engineering, procurement and construction contracts at $4.3 billion. ConocoPhillips said its project had received commitments for more than $2.8 billion from 26 commercial banks, the Export Import Bank of the United States, and the Japan Bank for International Cooperation.

In each of the joint ventures, Qatar Petroleum will hold a 70 percent interest. ConocoPhillips’ project is named Qatargas 3, and Shell’s is Qatargas 4. The projects are essentially identical, to provide economies of scale.

First cargoes from the plants are expected to depart Qatar in 2009. ConocoPhillips says its gas is destined for sale mostly in the United States.

Each of the plants will deliver the equivalent of just over a billion cubic feet of gas a day, coming from Qatar’s massive North Field.

By 2010, Qatar aims to be exporting the equivalent of 10 billion cubic feet daily in the form of LNG. The nation has also contracted for some of the largest gas-to-liquids plants in the world to move its huge gas reserves to market.

ConocoPhillips says all the definitive agreements have been signed for its project, and all the financing is in hand.

The Chiyoda-Technip consortium now has about $12 billion in contracts for LNG facilities in Qatar. The groups had already won orders for two LNG plants involving ExxonMobil joint ventures, one a year ago, the other last fall.

—Allen Baker