Shell reports delays for QatarGas 4 LNG project

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Nov. 25 -- Royal Dutch Shell PLC said it has delayed until late 2010 the start-up of the $8 billion Qatargas 4 LNG project, with the project’s first cargo possibly pushed into 2011.

“We had been planning for a start-up in early 2010 but now we expect that to come in late 2010," said a Shell spokeswoman, who added that the slippage represented a delay of 10 months.

The spokeswoman explained: “There have been some well-publicized schedule issues for the industry with several LNG projects for different consortiums under construction at the same time. Delays to competitors’ LNG projects have had a knock-on effect on Qatargas 4 timing…this is outside of our control…so a minor delay but a good performance overall.”

The spokeswoman did not say when the first cargoes would load, but Shell said ramp-up of the project could continue into 2011, suggesting the possibility that the facility may not be ready to load ships until then.

Further delays are possible, with industry analysts at Waterborne LNG saying they expect first cargoes in mid-2011.

Analyst IHS Global Insight said, “Shell’s revelation was widely expected in the markets, with several indications of significant project slippage over the past few months.”

“Nevertheless,” IHS Global Insight said, “this does not look too good for Shell from a project delivery and management point of view.”

Meanwhile, Qatargas Transport Co. (Nakilat) and Qatargas have taken delivery from the Samsung Heavy Industries’ shipyard on South Korea’s Gejoe Island of the 266,000 cu m MT Shagra.

The new Q-Max LNG carrier will be chartered on a long-term contract to QatarGas 4 and used to ship LNG primarily to North America and China.

Qatargas 4 is designed to convert 1.4 bcfd of gas into 7.8 million tonnes/year of LNG and 70,000 boe/d of NGLs. Shell has a 30% stake in Qatargas 4, with partner Qatar Petroleum, under a tax-and-royalty structure.

Contact Eric Watkins at hippalus@yahoo.com.

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