QP and ExxonMobil sign US$8.6bn Barzan gas project
Deal will ease concerns over power generation feedstock shortage.
Qatar Petroleum and ExxonMobil and ExxonMobil Barzan Limited Company, a subsidiary of ExxonMobil, on Thursday signed a joint venture agreement on the US$8.6 billion Barzan offshore natural gas project in Qatar's North Field, which will help the Gulf state meet its rising domestic gas demand.
The project is set to start commercial production in 2014, and will produce 1.4 billion cubic feet per day, mainly for the local market, according to Abdullah Al Attiyah, Deputy Prime Minister and Minister of Energy of Qatar.
The project was delayed in 2009 when raw material and labour prices were at their peak due tight supplies amid strong economic growth. Al Attiyah is quoted by Dow Jones as saying that the delay of the project was worth it as "more than" $2.5 billion was saved as a result.
The output of the project will be used in power generation.
The news comes only weeks after Qatar won the bid to host the 2022 World Cup, a huge undertaking that will put considerable pressure on the country's power generation capacity.
Most of the current power generation infrastructure in the country is natural gas fed which had led to speculation that Qatar would need to lift the moratorium on the North Field gas reservoir development in order to meet these demands.