Qatar's Ras Laffan Center of Natural Gas Development

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Researched by Industrial Info Resources (Sugar Land, Texas)--The South Pars/North Dome Gas Field, the world's largest natural gas condensate field, is in the Persian Gulf between the countries of Qatar and Iran. In Qatar, the North Dome section of the gas field is simply referred to as the "North Field" and contains the majority of the field's nearly 51 trillion cubic meters of natural gas. Qatar began developing the North Field in 1989, with most of the natural gas piped to Ras Laffan Industrial City (RLIC). The North Field may be capable of producing 760 million cubic meters per day by 2012, according to an ongoing study being conducted by Qatar Petroleum (QP) (Doha, Qatar).

Two companies control liquefied natural gas (LNG) production in Qatar at RLIC. RasGas Company Limited, a joint venture between QP and ExxonMobil Corporation (NYSE:XOM) (Irving, Texas), has seven operational LNG trains that produce about 59 trillion cubic meters per year. QatarGas Operating Company (Ras Laffan Industrial City, Qatar) generates nearly 70 trillion cubic meters per year of LNG through seven trains of its own. RLIC is also home to a couple of gas-to-liquids (GTL) projects owned by a joint venture between QP and Royal Dutch Shell PLC (NYSE:RDS.A) (The Hague, Netherlands) known as "Pearl," and a joint venture between UP and Sasol Limited (NYSE:SSL) (Johannesburg, South Africa) known as "Oryx." Together, they produce about 394,000 barrels of oil equivalent per day of hydrocarbon liquids from a feedstock in the North Field. The hydrocarbon mix is comprised of LNG, diesel, gasoline and naphtha, among other varieties.

GTL projects have taken off slowly. The GTL process, whether by the Fischer-Tropsch or the Mobil methods, is expensive. Petroleum companies have acknowledged the need for cleaner burning fuels in the future and GTL presents an opportunity for greater efficiency. Qatar, hoping to become the GTL leader, has become the center for GTL projects due to Qatar's massive natural gas reserves.

Several other GTL projects were on the books for Ras Laffan through QP. However, these have been suspended. Aside from Shell and Sasol, QP had formed GTL joint ventures with ExxonMobil, Marathon Oil Corporation (NYSE:MRO) (Houston, Texas) and ConocoPhillips (NYSE:COP) (Houston). ExxonMobil canceled its GTL plans in 2007 in favor of aiding QP with development of the North Field. Plans for both Marathon and ConocoPhillips were delayed in 2006. The reasons had little to do with economics; rather, Qatar wanted to reevaluate reservoir reserves in the North Field before going ahead with further GTL projects.

The ConocoPhillips GTL facility that was planned for RLIC was originally scheduled for construction this year, but due to QP's reevaluation, construction commencement has been pushed back to the next second quarter. QP and CononoPhillips signed an agreement to develop the $6.5 billion facility in 2003 and are expecting the facility, assuming everything moves according to plan, to be completed in 2014. The joint venture is anticipating an initial production capacity of 180,000 barrels per day of naphtha, diesel, and lube blend stocks.

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