By Stuart Matthews
Qatar has emerged as one of the world's leading gas producers with a rapidly growing liquified natural gas supply sector.
Qatar contains the world's third largest natural gas reserves - estimated at 26 billion m3 - after Russia and Iran - and has the largest non-associated gas field in the world, the North Field. It is a major exporter of LNG and a world leader in GTL technology. Gas production is expected to reach 90 billion m3 after 2011 almost double last year's level of around 48 billion m3.
The LNG industry in Qatar is well established and has been operating since 1996. There are two main exporters - Qatar LNG Company (Qatargas) and Ras Laffan LNG (RasGas). Qatargas has three 2.7 billion m3 trains and completed a de-bottlenecking project at the end of 2006 to boost processing capacity to 12.6 billion m3. In 2004 Qatargas 2 was announced as a joint venture between Exxon and Qatar Petroleum (QP) involving two 10.7 billion m3 trains one completed this year and the other in 2008. Preliminary agreements have also been signed for Qatargas 3 a joint venture between QP and ConocoPhillips which anticipates 7.5 million tonnes per year (t/y) of capacity designed for export to the US. It is expected to begin operations in 2009. Shell and QP also signed in 2005 an agreement for Qatargas 4 due to start production in 2009 or 2010 and again aimed at the North American market.
RasGas will, by the end of this year, have five trains operational, each with a capacity of 4.6 billion m3. A further 21.4 billion m3 of LNG capacity with two trains is being added by a Qatar Petroleum/ExxonMobil joint venture - RasGas 2 - the first of which will be commissioned in late 2008 or early 2009 using gas from the North Field as feedstock. All this new production will be exported to European markets.
Most of this new LNG capacity has already been marketed. In August 2006 RasGas signed an agreement with India's Petronet LNG to supply an extra 2.5 million t/y of gas bringing the annual total to 10 million tonnes from the third quarter of 2009. In April this year Japan's Marubeni Corporation signed an agreement to purchase 1 million t/y of LNG from Qatargas 4 from 2010. QP said earlier this year that almost all the 77 million t/y of LNG in place by 2010 has been sold. In April, it was announced that Qatar will launch the first market for trade in LNG with the new IMEX energy exchange which will be created in Energy City Qatar later this year.
Qatar is also involved in foreign LNG projects. In July the Italian government approved the construction of an 8 billion m3 regasification plant at Rovigo off the northern Adriatic coast. It is being operated as a joint venture by QP (45%), ExxonMobil (45%) and Edison (10%) using gas from RasGas at an initial 6.6 billion m3 per year possibly rising later to 8 billion m3 per year.
GTLs are also an important part of Qatar's gas industry. Earlier this year, the US $1 billion, 34000 barrel per day (bpd) Oryx project came on stream with the first consignment shipped to market in April. Sasol said in May that the plant had experienced ‘start-up operational challenges' and that operating rates were lower than planned, but that the installation of additional downstream equipment to increase throughput had begun and would be available for implementation ‘towards the middle of 2008'. Sasol has announced plans to triple the capacity of the site, potentially taking it to more than 100000 bpd.
From the end of 2009, the Shell-operated Pearl GTL plant is due on stream producing at full capacity 140000 bpd. But the GTL plans are not all going as smoothly as anticipated. Earlier this year QP and ExxonMobil announced that they had decided to abandon their joint GTL project and would instead focus on developing the Barzan project in the North Field. This will supply domestic gas to Qatar and produce around 1.5 billion cubic feet per day (cf/d) with start-up expected in 2012.
Integral to Qatar's gas ambitions is Ras Laffan Industrial City, a directorate of Qatar Petroleum (QP). This multi-purpose, and multi-dimensional industrial city includes an industrial port, and provides integrated services as well as several industrial facilities to existing industries and prospective investors. Under the city's master plan, facilities will include 16 LNG trains, seven GTL projects, five gas plants, six or seven ethylene plants and a wide variety of other industries. A new US $70 billion port at the site will accommodate approximately 225 million tonnes per year of products, more than double its present size, receiving 4 500 tankers annually to transport GTL and other gas products.
The current land area of Ras Laffan is also expected to double in size from 106km2 to approximately 240km2. The city celebrated its tenth anniversary in April 2007. Qatar's Deputy Premier and Minister of Energy and Industry, H.E. Abdullah bin Hamad Al-Attiyah said: "Within ten years, Ras Laffan has become the largest city for the gas industry in the world and will house the GTL industry as well as a number of projects in the future such as petrochemicals, electricity generation and water desalination plants."
Crude to increase
Oil takes second stage in Qatar's energy mix but it also has plans to increase crude production. Output is currently around 1.1 million bpd of crude and liquids. Reserves are estimated at around 15 billion barrels. The largest field is Dukhan, onshore, on the west coast joining six offshore fields - Bul Hanine, Maydan Mahzam, Id Al-Shargi North Dome, Al-Shaheen, Al-Rayyan, and Al-Khalij. Most crude is exported to Asian markets. The government announced plans to increase oil production capacity by an additional 300 000 bpd by the end of this decade.
State-owned Qatar Petroleum (QP) dominates the energy sector and is responsible for exploration and production (including agreements with foreign partners). It controls 50% of oil and 40% of gas production. It also has an 80% stake in petrochemical producer Qapco which produces around 525000 tonnes per year of ethylene, 360000 tonnes per year of low density polyethylene and 70000 tonnes per year of sulphur.
Qatar has a long-held policy of economic diversification and has encouraged foreign company investment in the country particularly for LNG and petrochemicals. Several major international energy firms are now heavily involved in the country's energy sector - including: Anadarko, Chevron, ConocoPhillips, ExxonMobil, Maersk Oil & Gas, Marubeni, Mitsui, Occidental Petroleum, Royal Dutch Shell and Total. QP has said it expects there will be up to US $70 billion of foreign investment over the next few years both upstream and downstream.
In recent developments, this July, Dolphin Energy began exporting gas from Qatar to the UAE via a 440km underwater pipeline. Capacity will eventually reach over 22 million m3 per day from the start of 2008. Oman is also to receive gas from Qatar as part of the project from next year. It has been reported that Dolphin is in talks with QP to increase gas supplies to a possible 99 million m3 per day, but it is understood that Qatar is reluctant to commit more North Field reserves while it carries out an impact study into the development of the field.