High-level discussions pending on sale of Qatari gas to Bahrain

By OGJ editors

HOUSTON, Apr. 10 -- High-level discussions are expected by the third quarter of this year on the proposed delivery of natural gas from Qatar's North field to Bahrain.

That is part of Qatar's plan to establish a natural gas grid among the countries of the Gulf Cooperation Council. Early this year Qatar, Bahrain, and ExxonMobil Middle East Gas Marketing Ltd. signed a memorandum of understanding for a utilization study aimed at supplying initially some 500 MMcfd of gas to Bahrain markets (OGJ Online, Jan. 8, 2002).

A committee formed by the participating parties was charged to carry out a gas utilization study, finalize a heads-of-agreement, and complete a long-term sales-and-purchase agreement. Middle East Economic Digest recently reported that the volume of gas and pipeline route options are among the issues to be discussed.

According to that report, Qatar has two options for how it will transport gas to Bahrain: through construction of either a spur from a proposed Qatar-Kuwait pipeline or a separate, independent pipeline serving the Bahrain market.

A sale and purchase agreement with Kuwait for Qatari gas also is expected by the third quarter of this year. ExxonMobil, also a participant in that deal, earlier reported that Kuwait signed a preliminary protocol and terms agreement for the proposed purchase of Qatari gas over 25 years, beginning in 2005 (OGJ Online, Jan. 30, 2002).

A proposed pipeline would transport 0.8-1.4 bcfd of lean gas from Ras Laffan to Al-Zour in southern Kuwait. Construction of that 590 km subsea pipeline would take 3 years to complete, officials said.

The enhanced gas utilization project being implemented jointly by Qatar Petroleum Co. and ExxonMobil in Qatar's supergiant North field would be the source of gas supplies for both Bahrain and Kuwait, officials said. The two companies signed a development and production-sharing agreement in May 2000 for that project.