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Mon 27 Feb 2012 02:02 PM

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Qatar Petroleum mulls investment in Australian LNG

Gulf state considering investment in Australian liquified natural gas facilities

Qatar Petroleum mulls investment in Australian LNG
Australia is now the fourth-largest LNG exporter and is already Chinas biggest supplier

Qatar Petroleum is considering investment in Australian liquefied natural gas (LNG) facilities and possibly buying into an export boom that poses the only serious challenge to its place as the world's top LNG exporter, a company official said on Monday.

"I think we are exploring all geographical places that would really achieve our business objectives and Australia definitely is an important proposition where maybe we will be able to find good investment opportunities," Abdulrahman Al-Shaibi, director of finance at Qatar Petroleum, told Reuters on the sidelines of a conference in Dubai.

By 2020, Australia may eclipse Qatar as the world's largest LNG exporting country.

Australia is now the fourth-largest LNG exporter and is already China's biggest supplier, with liquefaction capacity forecast to increase five times from current levels to 100 million tonnes per annum (mta) by 2020.

"Qatar Petroleum International (QPI) will be embarking on different types of projects. They have in the pipeline greenfield projects very similar to the projects we have done over the last 20 years. So most probably those projects will be attracting project financing. But of course we will be looking into multi-source financing to ensure that we raise sufficient funding."

The company is also considering raising domestic gas prices for feedstock gas, Shaibi said.

"I think prices for feedstock have been way below prices on the international market. We are considering raising the cost of the feedstock. But still it would remain within a range which could be seen as a subsidy," he said.

Shaibi said that petrochemicals would be "an important part of QP's investment portfolio going forward. We still have some large projects in the pipeline."

Qatar plans to spend $25 billion on expanding its domestic petrochemical industry over the next decade, more than doubling its annual petrochemical production capacity from 9.2 million tons now to 23 million tons by 2020.

In December Qatar signed a deal with Royal Dutch Shell to develop a $6.4 billion petrochemicals complex in the Ras Laffan industrial city in the state. Earlier this month Qatar Petroleum and Qatar Petrochemical Co (QAPCO) agreed to build a $5 billion petrochemical complex at Ras Laffan to produce petrochemical products mainly to be sold to high-growth markets in Asia, Africa and Latin America.

QP was in the final stages of appointing an adviser to evaluate financing options for the project, Shaibi said.

The company is also evaluating plans to tap the Islamic bond market as a means to finance new projects, he said.

"We are developing structures to tap the sukuk market. We are having discussions with certain firms that will enable structures that will create better momentum for more successful sukuk financing."

"It's unlikely in 2012, but maybe in 2013 sukuk will be an important and unique innovation that QP will take the lead (on)," he said.

QP recently completed a $10.4 billion financing of its Barzan gas project despite a difficult economic climate that has put a freeze on syndicated lending in the region.

Public-private partnership implementation is another area of focus for the company, he said.

"Today, we are focusing in terms of developing the required legal framework to enable PPP implementation," he said.

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