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Tue 12 Jan 2010 12:49 PM

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Qatar on track to start up new LNG facilities in 2010

Qatar is targeting China and India for sales of the additional supplies - official.

Qatar is on track to start up two giant new liquefied natural gas facilities this year that will complete capacity expansion plans in what is already the world's largest LNG exporter, a senior official said on Tuesday.

Qatar aims to boost LNG capacity to 77 million tonnes per year (tpy) by the end of the year. Output now is 54 million tpy, Qatargas Chief Executive Faisal al Suwaidi told a news conference in Doha.

Rising LNG output and gas shipment should help Qatar continue to outperform Gulf Arab neighbours in the world's top oil producing region this year.

New LNG projects starting up last year pushed economic growth to 11 percent in 2009, even as much of the world struggled with recession and oil exporting neighbours were hit by lower prices and lower oil output under OPEC agreements.

Qatar was targeting the fast growing and energy hungry economies of China and India for LNG sales, Suwaidi said.

He said: "China and India are the main markets for the next few years, they have huge needs."

Indian Oil Minister Murli Deora met Qatar's Oil Minister Abdullah al Attiyah last month to seek additional LNG supplies.

Qatar also signed deals last year to sell millions of tonnes of LNG to China.

Qatargas plans to begin start-up operations at its next LNG production facility, known as a train, in June, Suwaidi said.

Qatargas LNG train 6 would have capacity to chill enough natural gas to produce 7.8 million tonnes of LNG per year for export on specially designed tankers. Qatar started three facilities of the same size last year. They are the largest LNG trains in the world.

Trains typically take several weeks or months to start up as facilities are tested and volumes steadily increased as they come into operation.

Train 7, with equal capacity, was due to begin start up in September, Suwaidi said, adding trains 4 and 5, which started up last year, were already producing at 100 percent of capacity.

Qatargas was currently producing around 25 million tpy, Suwaidi said, with up to 30 percent destined for US markets.

Cold weather has increased demand for gas for heating in much of the northern hemisphere. US imports could reach a two year high in January, and Qatari exports to the US market have increased in recent weeks.

Suwaidi said: "Probably we can shift a few cargoes between markets depending on the balance of supply and demand,"

But short term market changes had no impact on Qatar's long term supply contracts and plans, he said.

Qatargas is one of two state run companies that produce the Gulf Arab state's LNG. The other is Rasgas.

Rasgas said last month it was due to start up the final train in its capacity expansion plan in 2010.

The projects would complete a rapid expansion to the world's dominant LNG seller after making its first shipment in 1996.

It has put new projects on hold as it studies the effect of the rapid development on the North Field, the world's largest known reservoir of pure gas and the source of its LNG.

Qatargas had no plans for maintenance work this year on its LNG facilities or on its Ras Laffan refinery, he said.

It started up in September the 140,000 barrels per day plant to produce oil products from condensates produced with gas. (Reuters)

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