Qatar UK gas exports delayed to June

A project to export Qatari gas to Britain will start a few months later than planned in June 2008, Qatargas' chief executive said on Monday.

The project is one of the world's largest to export liquefied natural gas (LNG), which is gas chilled to its liquid state for easier shipping.

"Start up will be in early June," Chief Executive Faisal al Suwaidi told reporters on the sidelines of a gas conference in Qatar's capital. "The UK will receive first gas imports during the summer."

The price tag for the project would be $13 billion, Suwaidi said. That is $1 billion more than the last estimate.

The Qatargas II project had initially scheduled startup to supply the UK over the winter, but an industry source told Reuters earlier this month that the project would be delayed to summer 2008 from the first quarter.

A tight market for building contractors caused the delay.

The number of projects that Qatar is building simultaneously as it boosts output from its massive North Field, the largest reservoir of pure gas in the world, has led to tight supplies of labour and raw materials and fanned costs.

Qatar has put a moratorium on any new projects beyond those already authorised and under construction from its North Field as it conducts a study into the reservoir. It was impossible to give any early indication of what the study would conclude as it was still a long way from completion, Suwaidi said.

The facility that will start up in June 2008 is Qatargas II train 4. The next train - the industry term for an LNG production line - at Qatargas will start up by the end of the year, Suwaidi said. Each train will have annual capacity to produce 7.8 million tonnes of LNG.

An import terminal for the gas is under construction at South Hook in Wales.

State-run Qatar Petroleum holds a 70 percent stake in train 4, while Exxon Mobil holds 30%.

The next train, train 5, is expected to export gas to the North American and European markets. It is 65% owned by Qatar Petroleum, while Exxon holds 18.3% and Total owns 16.7%.

Qatar plans to boost its LNG output to 77 million tonnes in 2010 from around 31 million tonnes this year.

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