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Courtesy of Qatar Petroleum
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Specially designed LNG carrier
leaving Qatar.
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Two years ago, ConocoPhillips had fewer than 10
employees in Qatar. Now, more than 70 call it home
and it is not uncommon to have 100 or more in country
on any given day.
The reason for the escalation is the Qatargas 3
LNG project (QG3) - a joint venture between Qatar
Petroleum and ConocoPhillips to produce roughly
1.4 billion cubic feet of natural gas a day. That
is enough natural gas to meet the needs of seven
million U.S. homes on a daily basis.
"This is a project of enormous importance,"
says Paul Warwick, ConocoPhillips Middle East North
Africa President. "It is a fully integrated
project, in that it connects all elements of the
value chain – from the reservoir to market."
Late last month ConocoPhillips signed four key definitive
agreements paving the way for the launch of the
Qatargas 3 project: An Engineering, Procurement
and Construction (EPC) contract for a large-scale
Liquefied Natural Gas (LNG) train was signed with
the Chiyoda Corporation and Technip France Joint
Venture (CTJV). The EPC contract marks the Final
Investment Decision for the project, with all definitive
agreements signed and financing completed. In addition
to the EPC contract award, Qatargas 3 also signed
a Development and Fiscal Agreement, a Sales and
Purchase Agreement and the necessary financing agreements.
Production will take place approximately 35 miles
offshore, in what is believed to be the largest
non-associated gas field in the world, with reserves
in excess of 900 trillion cubic feet (tcf) of gas.
QG3 is expected to produce an average of 7.8 million
tonnes per year of liquefied natural gas (LNG) over
its 25-year project life. The primary market destination
is the US.
"ConocoPhillips is proud of its strong relationship
with the State of Qatar and is pleased to be a part
of the QG3 project," said Leo Ehrhard, vice
president Qatar business development.
Targeting primarily the U.S. market, average daily
gas sales from the QG3 project are expected to be
approximately 1 billion cubic feet (bcf) and LNG
exports are anticipated to begin as soon as 2009.
Development of offshore platforms and an onshore
liquefaction plant (Qatargas Train-6) for QG3 is
progressing in parallel with QG4 (Qatargas Train-7),
a separate joint venture of Shell and QP.
As many as 20,000 people will be employed to complete
construction. The project is expected to take about
4 years – using a total of 70 million man hours.
"Logistically, it is an enormous undertaking
but first and foremost safety is ConocoPhillips’
and Qatargas' main priority," said Kerr Johnston,
QG3 venture manager.
The offshore facilities will consist of three unmanned
platforms with two pipelines back to Ras Laffan
Industrial City - an hour’s drive north of
Doha.
"We now have two rigs drilling appraisal wells
offshore," said Johnston.
"All drilling is on schedule and under budget
with excellent safety records."
The onshore facilities consist of a mega LNG train
at Ras Laffan on a tract of land roughly the size
of 180 football fields.
The LNG will be shipped from Qatar to the U.S.
via a mixed fleet of specially designed large LNG
carriers. This new fleet will include LNG tankers
of two different sizes and optimize the cost of
transportation with the flexibility for accommodating
different destinations and terminals. The larger
of the two classes – Qmax - can carry up to
267,000 m3 of LNG compared to ~145,000 m3 for conventional
ships. The QFlex class can carry up to 217,000 m3.
En route to the US, the ships will transit the
Suez Canal and sail the length of the Mediterranean
before crossing the Atlantic and entering the Gulf
of Mexico, close to 10,000 nautical miles each way.
Another unique feature of these ships is that they
will not use any of the boil-off gas as fuel. In
conventional ships, boil-off gas from the cargo
is traditionally used to fuel the boilers and produce
steam for the ship’s propulsion turbine. In
these new carriers the main propulsion is by diesel
engines, with the boil-off gas captured and re-liquefied
with an onboard plant so that all of the LNG cargo
loaded in Qatar can be delivered to the market.
Mike Stice, general manager of ConocoPhillips LNG
strategic planning and business development, said,
"Bringing the QG3 project to where it is today
required skills from nearly every functional organization
in the company. This is the culmination of a lot
of hard work by a lot of very dedicated professionals."
ConocoPhillips is the third-largest integrated
energy company in the United States, based on market
capitalization, and oil and gas proved reserves
and production; and the second largest refiner in
the United States. Worldwide, of non government-controlled
companies, ConocoPhillips has the eighth-largest
total of proved reserves and is the fifth-largest
refiner.
Headquartered in Houston, Texas, the company operates
in more than 40 countries. ConocoPhillips stock
is listed on the New York Stock Exchange under the
symbol "COP."
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