Impaired Qatar LNG plant to restart output soon

SET RIGHT: Technical problem had shut Qatargas' production from Jan. 8 (Getty Images)

Qatar should soon restart output from a plant that holds over a quarter of its liquefied natural gas (LNG) capacity after a technical problem shut production on Jan. 8, a spokesman for gas firm Qatargas said on Thursday.

"We are having an investigation into the problem," the spokesman said. "We don't have a restart date yet but it should be soon."

Most of the gas produced at the Qatargas I plant is shipped to Japan, with the remainder going to Spain and the spot market.

Customers had been informed of the production problems, the spokesman said. He declined to say if Qatargas had declared force majeure on shipments.

The shutdown was not seen having any immediate impact on Japanese LNG buyers procurement plans or spot purchases, as tank levels for many were high and demand for energy is weak due to the global economic slump, several Japanese LNG traders said.

The Qatargas I plant in 2008 shipped over 10 million tonnes of LNG, which is gas cooled to liquid form for export on specially designed vessels.

State-run Qatar Petroleum holds a 65 percent stake in the plant, while oil majors Exxon Mobil and Total each hold 10 percent.

Qatar is the world's largest LNG exporter, with capacity to produce 38 million tonnes per year (tpy). It aims to boost capacity to 77 million tpy by the end of 2010, although officials say it may not reach full capacity until 2012. Qatargas is one of two companies that produce LNG in Qatar. The other is Rasgas and both are majority owned by Qatar Petroleum.

Qatargas total capacity was expected to reach 42 million tpy when all expansion projects are completed. In July it started a new production facility, Qatargas II train 5, that will add 7.8 million tpy to capacity once fully on line.

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