Shell to buy Qatargas 4 output

A Shell affiliate signed an agreement with Qatar Liquefied Gas Co. Ltd. (4) in Doha to buy effectively the entire output—7.8 million tonnes/year—of LNG from the Qatargas 4 project.

Uchenna Izundu
International Editor

LONDON, July 13 -- A Royal Dutch Shell PLC affiliate signed an agreement with Qatar Liquefied Gas Co. Ltd. (4) in Doha to buy effectively the entire output—7.8 million tonnes/year—of LNG from the Qatargas 4 project.

Shell will send the LNG to its Elba regasification terminal for eastern US markets. Elba is being expanded to process 2.1 bcfd of gas by mid-2010 under an $850 million investment plan.

The sales contract underpins the development of Qatargas 4 which brings Qatar closer to its 77 million tonne/year target of becoming the world's leader in LNG production.

First LNG cargoes from Qatargas 4 are expected at the end of the decade, and the liquefaction complex will produce 1.4 bcfd of gas, including an average 24,000 b/d of LPG and 46,000 b/d of condensate from Qatar's North Field over the 25-year life of the project. The main engineering, procurement, and construction contract for onshore facilities was awarded in December 2005 and construction activities are progressing in Ras Laffan.

Linda Cook, Shell's executive director of gas and power, said the integrated project "is another clear illustration of our 'more upstream, profitable downstream' strategy in action". This is the seventh LNG project in which Shell has an equity stake.

Qatar Petroleum (QP) and Shell incorporated Qatargas 4 as a joint venture between an affiliate of QP (70%) and an affiliate of Shell (30%). The JV will own the Qatargas 4 project's onshore and offshore assets.

Contact Uchenna Izundu at uchennai@pennwell.com.

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