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French Version

Total signs on to $12.8 billion Qatargas 2 project

Firm to buy 5.2 million tons LNG per year from Qatar

The French oil company Total said Monday it had signed a protocol accord under which it is to take a 16.7-percent stake in the Qatargas 2 project for around $1 billion. "Total will purchase up to 5.2 million tons of LNG (liquefied natural gas) per year from Qatargas 2 for a period of 25 years," the group added in a statement. "The LNG is primarily intended for deliveries in France, the United Kingdom and the United States," the statement said.

The gas is to come from Qatar's North Field, with Total joining a partnership that includes Qatar Petroleum and Exxon Mobil of the United States.

Total chairman and chief executive Thierry Desmarest said: "The agreement will strengthen the group's long term production growth profile." Qatar's North Field holds more than 15 percent of the world's total proven gas reserves, and the country plans to boost annual LNG production to around 77 million tons by 2012 from a projected 20 million this year.

As reported in The Daily Star on Monday, Qatar's crown prince laid the cornerstone for the project on Sunday, located in Ras Laffan Industrial City, 80 kilometers north of Doha.

The deal with ExxonMobil was announced in December, when a statement said contracts worth some $4.5 billion had been signed for the construction of platform topsides, pipelines and two LNG trains at Ras Laffan in connection with the project.

A total of $7.6 billion was raised from 57 institutions, "the largest energy project financing ever and the first ever financing on a full LNG chain-integrated basis", according to Faisal al-Suwaidi, vice chairman and CEO of Qatargas 2.

The statement said two new companies had been formed to manage the LNG imports, terminal operations and sales of natural gas to ExxonMobil Gas Marketing Europe, which will in turn sell it to UK markets.

Qatar Petroleum and affiliates own 70 percent of the two firms while ExxonMobil or affiliates of the US oil giant own the rest.

The feed gas for the two LNG trains will be sourced from the North Field, which has proven reserves of more than 900 trillion cubic feet, making it the biggest non-associated gas field in the world.

It amounts to more than 15 percent of the world's total proven gas reserves, and is enough to last the tiny Gulf state about 250 years.

Also on Monday, Qatar's Rasgas-2 LNG venture signed a final agreement with Distrigas Europe for sales of 2.05 million tons per year (tpy) of LNG through the Zeebrugge import terminal in Belgium.

The emir of Qatar, Sheikh Hamad bin Khalifa al-Thani, announced the final deal during his opening address to a natural gas conference in Doha.

Vice chairman of the board of Rasgas, Ibrahim al-Ibrahim, said the deal would last for 20 years starting in 2007.

Rasgas-2 already has supply deals with India and Italy.

The venture has three LNG trains - two with a capacity of 3.3 million tpy each and another at 4.7 million tpy - in operation.

Ibrahim said Rasgas-2 was building two new trains with capacities of 4.7 million tpy each, with the first production line due to come onstream in October 2005.

On Sunday, Doha signed a "Qatargas 4" deal worth up $7 billion with Royal Dutch/Shell to supply LNG to North America and Europe.

Beirut,03 07 2005
Redaction
The Daily Star
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