Qatar Sees More Output Gains

Qatar met the chief executives of major energy companies to celebrate reaching an annual production capacity of 77 million tons of liquefied natural gas, underlining its status as the world's largest exporter of LNG.

The Persian Gulf state may further increase its capacity to 10 million tonnes a year if it can improve efficiency in their production units, the Energy Minister Abdullah al-Attiyah told reporters. Exxon Mobil Corp. 's Rex Tillerson, Royal Dutch Shell Plc Voser Peter and ConocoPhillips, Jim Mulva, were among the executives who attended the ceremony in the industrial city of Ras Laffan Qatar yesterday.

"If we want to expand in the future, we will expand as a renewal" so that existing facilities more efficiently, al-Attiyah said yesterday. The construction of new LNG would be a more expensive option, he said.

While Qatar is recognized as the largest exporter of LNG and is the world's third largest natural gas reserves after Russia and Iran, its gas fields is a source of growing volumes of natural gas liquids such as propane, butane and condensate. These products, known collectively as natural gas liquids, is used for commercial products like crude oil or refined, increasing the total energy sales in Qatar.

Qatar will be a year of grace with pump 1.19 million barrels of natural gas liquids per day, according to a forecast based in Paris, the International Energy Agency. NGL will be leaving the country for the first time exceeds its production capacity of crude, the IEA estimates is 1,020,000 barrels per day in 2011. combined capacity of Qatar for the production of natural gas liquids and crude oil to exceed its OPEC partners, Algeria and Libya, according to forecasts by the agency.

Higher Traffic

"It is very clear Qatar pushes the ranks of oil producers and also - for the semi-refined some of these - the ranking of manufacturers of refined products, as well," said Lawrence Eagles, head of global research raw materials JPMorgan Chase & Co. in New York, speaking in a telephone interview in November.

The tiny nation of 1.6 million people is the second smallest producer of crude in the Organization of Petroleum Exporting Countries. Ecuador is the smallest. OPEC quotas do not apply only to oil, natural gas liquids.

transforming Qatar into a major producer of natural gas liquids has implications for OPEC, which supplies 40 percent of world crude, and the group's ability to influence energy markets. Qatar was the only one of the 12 OPEC members to see their combined production of crude oil and NGL place last year, after the group reduced its production target in December 2008. For next year, Qatar will be the only member capable of producing liquid natural gas than oil, the IEA says.

Flagship plant

Shell is building a 19 billion U.S. dollars of gas to liquid plant to add capacity of NGL. The Anglo-Dutch company expects its plant in Pearl to be fully operational in early 2012 and to begin converting the gas into kerosene, diesel, lubricants and naphtha in the second quarter of this year.

Qatar can expand the production of gas to liquid, even after the pearl is finished, al-Attiyah said yesterday.

Other OPEC members are producing more natural gas liquids of their own. By 2015, production of NGL group may be equal to 20 percent of their combined production of oil and natural gas liquids, compared with 14 percent in 2009, IEA data show.

"While natural gas liquids OPEC are a growing competition for OPEC oil is difficult to see how they could be included in the quota system," said Robin Mills, an oil analyst based in Dubai and author of 'The myth of the oil crisis, in an interview in August.

Early Celebration

Qatar exported its first cargo of liquefied natural gas in 1996. The country will have the capacity to produce annually 77 million tonnes of LNG, or about 3.75 trillion cubic feet of gas by pipeline, after Qatar Liquefied Gas Co. brings its liquefaction plant in the seventh and final operation early 2011. Qatar officials organized event yesterday in anticipation of this achievement.

Qatar Liquefied Gas, known as Qatargas, is a partnership between the state Qatar Petroleum, Exxon Mobil, ConocoPhillips, Total SA and Shell. Another company, Ras Laffan Liquefied Natural Gas Co., commenced its LNG production unit seventh and final earlier this year. RasGas, as this company is known, is a partnership between Qatar Petroleum and Exxon Mobil.

A moratorium on gas fields in Qatar North field opposes the development of additional LNG projects. The North Field is the largest gas reserves, with an estimated 900 trillion cubic feet of fuel. The moratorium will not rise before 2014 in any case, Saad al-Kaabi, director of Qatar Petroleum for oil and gas companies, said last year.

LNG accounts for half the growth in gas trade between 2008 and 2035, the IEA said in November. The fuel can be transported by refrigerated vessels specialized markets inaccessible by pipeline.

Malaysia was the second largest LNG exporter after Qatar last year, followed by Indonesia, Australia and Algeria, according to BP Plc.