Gulf Times - 9/7/2006

QATAR will make a foray into the Mexican and French LNG markets following the conclusion of a sales and purchase agreement (SPA) between Qatargas 2 (QG 2) and Total in Doha yesterday.

Under the SPA signed between Qatargas 2 chairman and Second Deputy Premier HE Abdullah bin Hamad al-Attiyah and Total president (Exploration and Production) Christophe de Margerie at the Four Seasons, Total would buy up to 5.2mn tonnes of LNG a year from Qatargas 2 for 25 years.

Some 700,000t of LNG will be supplied to Mexico and the remainder would be sent to markets in France, the UK and US. Qatar is the first Gulf LNG producer to enter the Mexican market.

The supplies will be made from Qatargas 2, which will go onstream either in the last quarter of 2008 or early 2009.

Addressing a press conference al-Attiyah said, “We hope to commence supplies soon after Qatargas 2 goes onstream”.

He said the contracts expanded Qatar’s access to new strategic markets such as Mexico and France even as they added diversity of customers to already established LNG markets such as the UK and the US.

Qatargas 2 is an integrated project covering the development of two new LNG trains, each with an annual capacity of 7.8mn tonnes with the feed gas coming from the North Field. The LNG trains are being built at Ras Laffan.

Qatargas 2 stakeholders are Qatar Petroleum, ExxonMobil and Total.

Qatargas 2 vice-chairman and CEO Faisal al-Suwaidi said the supplies to Mexico, France, the UK and US would be made in some 14 huge LNG tankers including six Q-Max and eight Q-Flex vessels.

“They will join the Nakilat fleet in time for supplies to the four markets,” al-Suwaidi said.

Speaking to Gulf Times De Margerie said Total’s diversified and strong presence in the gas markets of the Atlantic basin made it a key player in the supplies of LNG to France, the United Kingdom, Mexico and the United States.

De Margerie said gas could be easily fed to Mexico from the US through an existing grid.

“Mexico’s gas resources are fast depleting and it is now mostly relying on imports to meet its LNG demand. Qatar will be the first Gulf supplier to provide LNG to Mexico,” he said.

He said Qatari gas would be mostly used by Mexican industries for power generation.

On the SPA he said, “It is the result of a successful joint negotiation among Total, QP and ExxonMobil. It is another important step in the fulfilment of Total’s continuing objective to grow its LNG portfolio. This agreement will strengthen the group’s long term production growth profile. Total’s participation in Qatargas 2 reinforces its position in Qatar where it has been present for almost 70 years now”.

Total is one of the founding partners with 10% (20% of the upstream) of Qatargas.

Already Total has a range of assets and projects in Qatar where it operates the Al Khalij oil field and has activities in the petrochemical sector with Qapco, QVC and the Qatofin project.

Total has also a 24.5% interest in the Dolphin project, which is presently under construction and will produce by the year-end or in 2007, some 2bn cu ft per day (bcf/d) of natural gas to be transported to the United Arab Emirates from Ras Laffan.