Construction Work Starts On Qatargas 3 And 4 LNG Projects
Construction work on the world’s largest LNG plants, Qatargas 3 and Qatargas 4 started on 2 April following the laying of foundation stones at the Ras Laffan site by Qatar’s Heir Apparent Shaikh Tamim bin Hamad Al Thani, attended by partners Qatar Petroleum (QP), ConocoPhillips and Shell. The two projects, which will use 2.8bn cfd/day to feed two 7.8mn t/y LNG trains, operated as a single venture both onshore and offshore in order to improve synergies and cut costs. The projects were formally launched in December with the award of the $4bn engineering, procurement and construction contracts to a joint venture of Technip and Chiyoda (MEES, 26 December 2005).
Qatargas 3 has signed all definitive agreements and successfully completed financing. The project has received commitments for more than $2.8bn from 26 commercial banks, US Exim and Japan Bank for International Cooperation (JBIC). Commercial agreements and financing for Qatargas 4 are advancing rapidly, the partners said. Qatargas 3 is an integrated project, jointly owned by QP (68.5%), ConocoPhillips (30%) and Mitsui (1.5%). Qatargas 4 will be implemented through a joint venture between QP (70%) and Shell (30%). Each project comprises upstream production facilities to produce approximately 1.4bn cfd of natural gas, including an average 70,000 b/d of LPG and condensate combined from the North Field over the 25-year life of the project. The first LNG cargoes from Qatargas 3 are to be delivered in 2009 and from Qatargas 4 around the end of the decade.
Access to growing US gas markets is the key element in both the Qatargas 3 and 4 LNG marketing strategies, the partners said. Qatargas 4 volumes are intended for gas markets in the eastern US. Shell, as a sponsor of Qatargas 4, has entered into agreements with Southern LNG and Elba Express Pipeline Company to acquire additional capacity at the Elba Island LNG import terminal as well as in a new natural gas pipeline. Both projects will be filed with the US Federal Energy Regulatory Commission (FERC) for approval in 3Q 2006. In December, Qatargas 3 executed a sales and purchase agreement with ConocoPhillips for the full train output which will be marketed primarily in the US. ConocoPhillips is one of the leading marketers of natural gas in the US and following its acquisition of Burlington Resources will become the largest natural gas producer in North America.
