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Tue 9 Jun 2009 01:13 PM

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Qatargas sees China, India as key LNG customers

Company also says it hopes to have new production facility on line by Q4.

Qatargas, one of two majority-state owned producers in the world's top LNG exporter, expects its train 5 production facility to come onstream possibly by the fourth quarter of this year, an official said on Tuesday.

"We expect train 5 to start production by end of this year, hopefully by the fourth quarter," Qatargas's marketing director of its Commercial and Shipping Group, Alaa Abujbara, told reporters on the sidelines of the Asia Oil and Gas Conference.

Last month, Qatargas Chief Executive Faisal al-Suwadi said train 5's mechanical completion would be within "a few weeks". The facility has an annual capacity of 7.8 million tonnes.

Train 4, which was brought down for maintenance several weeks ago, is already back online.

"The first cargo has been loaded, and is headed for Wales," Abujbara told delegates at the annual conference.

Trains 6 and 7 are on track to start up in 2010. Abujbara declined to forecast a detailed timeframe, citing mechanical complexities of the production lines. Despite lower demand in Asia for liquefied natural gas (LNG), which is natural gas chilled to liquid form for shipment, Qatargas remains optimistic about consumption from China and India, he said.

"China will be the next biggest buyer of LNG after Japan, and India is on the same scale as China. Spot LNG is looking very attractive to our customers in China right now."

Last month, Qatari Energy Minister Abdullah al-Attiyah said China's and India's thirst for LNG was compensating for lower consumption from established big LNG consumers Japan and Korea.

During the economic downturn, Qatargas has tried to manage the excess supply by diverting cargoes to other markets such as Europe and the United States, Abujbara told conference delegates without elaborating.

"We are working very hard with our core Japanese customers to help them manage these turbulent times," he added.

Traders said the company had also diverted some parcels from UK or Europe to India.

The small Gulf Arab state of Qatar has the world's third-largest gas reserves. (Reuters)

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