Qatar to supply LNG long-term to the US

Ras Laffan Liquefied Natural Gas Co Ltd (RasGas), has shortlisted companies controlled by Italy's Eni SpA for a gas liquefaction plant of up to $4 billion, the Qatari company's head said.

Managing director Alexander Dodds said that the construction contract, which will be awarded soon, should also help finalise the first Qatari long-term LNG contract for exports to the US, through a deal with ExxonMobil Corp.
Snamprogetti, the wholly owned engineering arm of Eni, and Saipem SpA, in which Eni holds 43 per cent, have together been selected as preferred bidders for the construction of the RasGas-III project, Dodds said.
The current tender is for a 7.8 million tonnes per year train, or LNG processing facility. The plant will be the sixth built for RasGas and is expected to start production early 2009.
A seventh train of equal size is also planned as part of RasGas-III.
Dodds added that other contenders which have qualified for the tender are a consortium comprising Chiyoda Corp of Japan and Technip SA of France. Another consortium includes JGC Corp of Japan and Halliburton Corp's Kellog Brown & Root unit.
Dodds said the tender is valued at $3 billion to $4 billion between 2005 and 2009. However, the overall investment for the RasGas-III project, including ships, is estimated at $12 billion.
He said that once the contractor's agreement is signed mid-year, he expects to finalise a supply contract to the US via ExxonMobil.
A preliminary deal was already approved by RasGas and Exxon in October 2003 to supply the US market with 15.6 million tonnes of LNG per year for 25 years." Qatar has already sold spot LNG cargoes to the US market but it will be the first time (the Gulf state) supplies it as part of a long-term contract," Dodds said.
ExxonMobil and RasGas are "in the process" of negotiating the development of receiving terminals in the Gulf of Mexico, in which the Qatari company will take a stake, he said.
State-owned oil company Qatar Petroleum has a 70 per cent stake in the Qatari project for which the Eni companies are bidding, and ExxonMobil has 30 per cent. RasGas is one of the two largest Qatar-owned companies with concessions in the country's North Field, along with Qatar Gas Ltd.