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ExxonMobil and Qatar Petroleum Progress LNG Project

Source: www.gulfoilandgas.com 11/16/2005, Location: Middle East

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Qatar Petroleum and ExxonMobil Ras Laffan (III) Limited, a wholly owned subsidiary of Exxon Mobil Corporation , announced the launch of Ras Laffan Liquefied Natural Gas Company Limited (RL3). RL3 is a further expansion of the existing LNG production facilities operated by RasGas Company Limited (Qatar Petroleum 70 percent; ExxonMobil 30 percent) at Ras Laffan Industrial city in North Eastern Qatar. This project is planned to bring the total number of trains operated by RasGas to seven (Trains 1 and 2 in RL, 3 through 5 in RL II and 6 and 7 in RL 3) and is expected to increase RasGas LNG production capacity by more than 70 percent.

Full-chain investment in RL 3 is estimated at near $14 billion. This includes the design, construction and operation of two 7.8 million-ton-per-year (MTA) LNG Trains 6 and 7, and all other facilities associated with the development, production, transportation, processing, treatment, liquefaction, regasification, storage, delivery and sales of approximately 15.6 million tons a year (MTA) of LNG along with associated by-products such as liquified petroleum gas, condensates, helium and sulphur.

The new LNG project, one of the largest ever announced, will be developed in two consecutive phases with Train 6 scheduled to begin production in the second half of 2008, and Train 7 anticipated to come on stream approximately one year later. Twenty-eight wells are planned to be drilled to supply the two trains with natural gas, sourced from Qatar's giant North Field, which is estimated to contain natural gas resources in excess of 900 trillion cubic feet. LNG from the project will be delivered to targeted markets, principally the United States.

"RL 3 is indicative of the success we have achieved in commercializing our substantial gas resources with our valued partner, ExxonMobil, and we look forward to developing this world class LNG project as we aggressively pursue Qatar's vision to be the world leader for LNG development," H.E. Al-Attiyah said.

Earlier this year, Engineering, Procurement and Construction (EPC) contracts for Trains 6 and 7 were awarded to J. Ray McDermott Middle East for the offshore facilities and to the Chiyoda Corporation and Technip France Joint Venture (CTJV) for the onshore work.

RL3 also has signed financing documents securing funds to proceed with execution of the project. In total, $4.6 billion was raised from 19 commercial banks, capital bond market offerings and loans from ExxonMobil. The capital markets portion of the financing ($2.25 billion) represents the largest energy project financing in the history of the capital markets. This was the initial tranche of a broader $10 billion debt program to underwrite the remaining expansions for RL 3 and RL II.

To deliver the LNG to its targeted markets, RL3 plans to lease 12 LNG tankers to support Train 6 to be constructed by Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries. Daewoo will build five tankers, Samsung four and Hyundai three. It is expected that an additional six LNG tankers will be required to support Train 7.

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