Qatar to invest heavily in gas sector

Nov 22, 2003 01:00 AM

Qatar is pushing ahead with an ambitious programme to tap its gas treasure and ensure a high fixed income in the long term away from volatile oil exports. The Gulf country exported 13.5 mm tons of LNG in 2002 to become the top LNG producer in the Middle East and output is set to climb gradually in the next five years to surpass Indonesia and all other exporters. But the small OPEC member is not neglecting its oil sector as it is investing nearly $ 4 bn to expand its sustainable crude production capacity to nearly 1 mm bpd in 2007 from 850,000 bpd at present.
"Expansions in Qatar's oil and gas sectors are prompted by successive discoveries over the years… both the gas and oil reserves have been massively revised up," said a recent report by the National Bank of Qatar.

From only 4.5 bn barrels in 1998, Qatar's proven crude oil resources were revised up to nearly 15.2 bn barrels at the end of 2002 as more discoveries have been made and advanced drilling technology has been introduced. The country's gas wealth also jumped from 8.5 tcm to around 25.5 tcm at the end of last year to maintain its position as having the world's third largest proven gas reserves after Russia and Iran.
Qatar's main expansion programmes in its oil sector are being carried out at its Dukhan and Al Shaheen fields, which had a combined output capacity of around 540,000 bpd last year.

Expansions will lift capacity to 590,000 bpd in 2007. But such programmes are dwarfed by its mega projects being carried out at its mammoth North Field, the world's largest single reservoir of natural gas. At least $ 20 bn has been pumped into these projects and Qatari officials expect an additional $ 25 bn to be invested in expansions in oil and gas.
"The total investments between 2002 and 2009 will reach $ 25 bn compared with over $ 20 bn invested in the past 10 years," said Sheikh Hamad bin Faisal Al Thani, Qatari minister of economy and commerce.

Qatar gave a strong push to its LNG programme in October when it signed a $ 12 bn contract with the world's top oil company ExxonMobil for the supply of 15.6 mm tpy of LNG to the US market. Deliveries are expected to begin in 2008-09, when Qatar becomes the world's top LNG producer.
The country's two main LNG ventures are RasGas and QatarGas, which are both controlled by the government along with Western partners, which are needed to help in providing funds, technology and markets.

The expansions are expected to boost the supply capacity of the two companies to around 17.5 mm tons by the end of this year before it climbs to over 20 mm tons in 2004. It will then gradually increase to reach nearly 36 mm tons in 2008, according to official forecasts.
"These expansions are linked to contracts. Qatar's massive gas reserves mean the country can further increase capacity provided it secures more supply deals... but I don't this is difficult given its location close to key Asian consumers and the steady rise in global gas demand." a Gulf industry source said.

Source: Al Nisr Publishing
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