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Thu 30 Sep 2010 12:16 AM

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Qatargas to load LNG from train 7 in February

LNG production line will cement Qatar as the world's biggest exporter when completed.

Qatargas to load LNG from train 7 in February
LNG LOADING: Qatargas will start loading LNG from its Qatargas 3 Train 6 by Dec, and from its Qatargas 4 Train 7 in Feb 2011. (Getty Images)

Qatargas will start loading liquefied natural gas (LNG) from its Qatargas 3 Train 6 by December and from Qatargas 4 Train 7 in February 2011, the company's chief operating officer said on Wednesday.

Royal Dutch Shell holds 30 percent of the Train 7, a 7.8 million tonnes per year (mtpa) LNG production line which, when completed, will cement Qatar's position as the world's biggest exporter with an annual production capacity of 77 mtpa.

Speaking to Reuters on the sidelines of an industry seminar, Ahmed al Khulaifi, said: "It will start loading in February and the first cargo will leave in February."

State run Qatar Petroleum owns 70 percent of Qatargas 4, which was built to supply mainly the United States and Europe but will likely send cargoes to Asia because of a surge in gas production in North America which has slashed US gas prices.

Shell said in late 2009 the start up of the $8 billion Qatargas 4 project had been delayed to late 2010, because contractors were struggling to keep pace with developments in Qatar's booming gas industry, with the first cargo possibly pushed back to 2011.

The delay helped reduce oversupply in the global LNG market in early 2010, giving some support to prices in Europe.

Qatar is the world's biggest exporter of LNG, or gas cooled to liquid form so it can be transported by tankers.

The start up of new LNG projects should help push Qatar's GDP growth above 16 percent in 2010, with analysts expecting growth of around 12 percent next year.

Al Khulaifi said the firm's 7.8 mtpa Qatargas 3 Train 6 would start loading in late November or early December.

He said: "Train 6 is loading in late November/early December and leaving in December. This is the target."

The Qatargas 3 Train 6 project is owned 68.5 percent by Qatar Petroleum (QP), 30 percent by ConocoPhillips and 1.5 percent by Japan's Mitsui & Co Ltd.

Train 6 was built primarily to supply the United States but is likely to send much of its output to China under long term Qatari LNG supply deals.

Although China has contracted about 10 mtpa of output from Qatar, some analysts doubt it will absorb all the extra output the new trains can produce.

In the longer term output from the two trains could end up in new LNG markets like Poland, which hopes to build an import terminal by 2014 in Thailand or Dubai, an industry analyst said.

When asked where the first few cargoes entering an already well supplied global market might be offloaded, he said: "In the short term it is probably going to be Europe or the United States."

The Golden Pass LNG terminal in the US - a joint venture between QP, Exxon and Conoco where construction work began before US appetite for imported gas was dampened by its own shale gas boom - will receive its first cargo next month from Qatar and may see more Qatari LNG arrive after Train 6 starts up, he said.

Shell told Reuters on Monday it was on track to complete the construction of the world's largest gas to liquids (GTL) plant, Pearl, by the end of 2010 with full capacity expected by early 2012.

Speaking to Reuters, Andy Brown, managing director, Pearl GTL, said: "We're now in the commissioning phase of the first train, so the major construction of both trains actually will largely complete this year."

He added: "Next year, we will take the gas in and we will ramp up, start production of the first phase basically through the early part of next year ... We will have GTL production next year."

The $18 billion-$19 billion project in Qatar, which Brown said was still on budget, has a capacity to produce 140,000 barrels per day (bpd) of GTL products which include diesel, kerosene, naphtha and lubricant oils. (Reuters)

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