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Tue 20 Mar 2012 04:17 PM

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QatarGas planning LNG train closures, say sources

World's largest LNG producer to temporarily close plants at QatarGas 1 - sources

QatarGas planning LNG train closures, say sources
At least two of three production plants at QatarGas 1 will stop for maintenance.

Qatar Liquefied Gas, the world’s largest producer of the chilled fuel, plans to shut one of its biggest units in September and some smaller facilities next month, said two people with direct knowledge of the work.

At least two of three production plants, or trains, at QatarGas 1 will stop for maintenance, said the people, who declined to be identified because the information is not public.

The units will shut late April for 13 to 23 days, one of the people said. QatarGas’s fourth train, part of QatarGas 2, will halt in September for more than a month, the person said.

Maintenance schedules in the Gulf state, the world’s largest exporter of LNG, are a price driver for consumers from Asia to the Americas. Already the producer of more than a quarter of the world’s LNG, Qatar increased its production capacity by 11 percent to 77m metric tons last year as it started a 14th train.

QatarGas operates a rolling program of planned maintenance at its facilities, a company official said March 15 by e-mail, without elaborating on dates. Necessary, planned and safe shutdowns are coordinated with operations, shipping and customers as part of the company’s annual planned maintenance, the official said.

LNG prices may surge as Japan’s avoidance of nuclear power and limited supply increases create an “extremely tight” market, according to a Sanford C Bernstein & Co report. Spot prices in Asia may rise to $20 per million British thermal units, Bernstein Research said today.

The last time Qatargas maintenance became public, on August 26 last year, the price of winter gas in Britain rose as much as 5.4 percent to 75.9 pence a therm. Work on trains 5, 6 and 7 was planned from mid-September 2011, Reuters reported at the time.

Japan, the world’s biggest LNG user, paid an average price of $16.76 per million Btu for the fuel in January, LNG Japan data show. UK summer gas advanced for a third day, rising 0.7 percent to 61.6 pence a therm, according to broker datas compiled by Bloomberg. That’s equal to $9.74 per million British thermal units.

Demand for the chilled fuel will grow 6.9 percent this year to 252m tons, with China and India among the fastest- growing markets, according to Bernstein’s estimates.

QatarGas 1 is a venture between state-run Qatar Petroleum, Exxon Mobil, Total SA, Mitsui & Co. and Marubeni, according to the company’s website. Each of the trains, which began operation in 1996, has the capacity to produce 3.2m tons of LNG a year, with their main export markets being Japan and Spain, according to the website.

QatarGas’s fourth train, a venture between Qatar Petroleum and Exxon Mobil, supplies the UK market and has the capacity to produce 7.8m tons a year of the fuel, making it one of the six largest LNG trains in the world.

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