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Foundation stone laid for Qatargas 3 and 4 projects

DOHA — Marking the beginning of the execution phase for two of the world's largest liquefied natural gas (LNG) developments, Qatar Petroleum (QP), ConocoPhillips and Royal Dutch Shell plc (Shell) bore witness yesterday as Shaikh Tamim bin Hamad Al Thani of the State of Qatar, laid the foundation stone for the Qatargas 3 and Qatargas 4 projects.

Combined, the projects are expected to generate approximately 2.8 billion cubic feet per day of natural gas — the majority of which is targeted for delivery to the United States.

The ceremony was held at Ras Laffan Industrial City and attended by dignitaries, visitors and guests from Qatar and abroad.

Both Qatargas 3 and Qatargas 4 have worked jointly to reach this important milestone in record pace and all the necessary resources to carry out the projects are now in place.

In order to capture substantial synergies, the projects jointly are executing the development of the onshore and offshore assets to enable them to be operated as a single integrated venture.

It was only last December when both Qatargas 3 and Qatargas 4 announced their Final Investment Decisions and awarded the onshore Engineering, Procurement and Construction (EPC) contract to the Chiyoda Corporation and Technip France Joint Venture (CTJV).

The EPC contract with CTJV covers the engineering, procurement, and construction of onshore facilities for two large-scale LNG trains, each with a nameplate capacity of 7.8 million tonnes-per-annum.

The total price of this contract is valued around $ 4 billion.

Qatargas 3 has signed all definitive agreements and successfully completed financing. The project has received commitments for more than $2.8 billion from 26 commercial banks, the Export Import Bank of the United States (U.S. Exim) and Japan Bank for International Cooperation (JBIC).

Commercial agreements and financing for Qatargas 4 are advancing rapidly. Qatargas 4, which has a similar debt requirement to Qatargas 3, will be the next large Qatari project to engage the international financial community and is already attracting a significant amount of interest from potential lenders.

Qatargas 3 is an integrated project, jointly owned by Qatar Petroleum (68.5 per cent), ConocoPhillips (30 per cent) and Mitsui (1.5 per cent).

Qatargas 4 will be implemented through a joint venture between QP (70 per cent) and Shell (30 per cent). Each project comprises upstream gas production facilities to produce approximately 1.4 billion cubic feet per day of natural gas, including an average of approximately 70,000 bbl/d of Liquefied Petroleum Gas (LPG) and condensate combined from Qatar's North Field over the 25-year life of the project.