Qatar announces $19 billion in natural gas deals

DUBAI, United Arab Emirates — Qatar's state-run petroleum company and two major international oil companies signed deals on Sunday worth a total of about $19 billion to develop liquefied natural gas for European and American markets.

Qatar Petroleum and Exxon Mobil Corp. announced the launch of a huge $12.8 billion liquefied natural gas, or LNG, project that aims to ferry gas to Britain for the next 25 years.

Qatar Petroleum officials dubbed the Exxon Mobil deal the world's largest-ever LNG development effort and largest energy financing, involving $7.6 billion in investments from 57 different institutions, including Islamic banks.

Separately, Exxon Mobil's European rival, Royal Dutch/Shell Group of Companies, said it signed an agreement with Qatar Petroleum to build a plant in Qatar's Ras Laffan City that is expected to produce 7.8 million tons of LNG over 25 years, with deliveries to American and European markets starting from 2010.

Shell has a 30 percent stake in the project named Qatargas 4, while Qatar Petroleum holds the remaining 70 percent interest in the $6 billion venture.

The tiny nation of Qatar, which sits atop one of the largest reserves of natural gas, stands to be the world's top seller of liquefied gas — and one of its wealthiest countries — shortly after decade's end.

Meanwhile, Qatar Oil Minister Abdullah bin Hamad al-Attiyah said Sunday the Organization of Petroleum Exporting Countries would stick to its current production ceiling of 27 million barrels a day when it meets in Isfahan, Iran, March 16.

"We will study the market supply and demand but I don't think there will be (a production) cut," the minister said, according to Dow Jones Newswires. "There will be a rollover of the output ceiling."

In the long term, the growing shipments of liquefied natural gas are "absolutely crucial" in helping gas replace oil as a fuel in heating and electrical power plants, said Youssef M. Ibrahim, director of Dubai-based Strategic Energy Investment Group.

Oil prices have hovered at record levels beyond $50 per barrel, and analysts said cheaper gas fuel is more desirable for its cleaner-burning qualities.

"It will make Qatar, on a per-capita basis, probably the richest country on the earth," Ibrahim said.

Britain will be the chief market for the liquefied gas in the Exxon Mobil venture announced Sunday, receiving 17.2 million tons of LNG per year, for 25 years. The first shipment is expected to arrive by late 2007, Qatar Petroleum said in a prepared release.