Qatar has begun shipping its first liquefied natural gas exports to Japan and set the stage for long-term transportation of its LNG.
The first cargo of LNG was to be lifted late this month at Qatar's Ras Laffan terminal and delivered in early January to Chubu Electric Power Corp. in Japan.
Meanwhile, state-owned Qatar General Petroleum Corp. (QGPC) has let contract to a group of five Japanese shipping companies, led by Mitsui O.S.K. Lines Ltd., to transport 6 million metric tons/year of LNG for 25 years.
The other four members of the consortium are Nippon Yusen KK, Kawasaki Kaisha Ltd., Showa Lines Ltd., and Iino Kaiun Kaisha Ltd. The contract started Dec. 1.
Transportation contract
The contract gives the Japanese shipping industry, long saddled in a structural recession, a major shot in the arm from what could be one of the largest liquefied natural gas transportation projects ever.
The project will meet Japan's LNG demand through 2004 and serve as a milestone for the Japanese shipping industry, which is striving to secure a stable flow of earnings through energy transportation.
The project will require the construction of 10 large LNG carriers, which will be jointly owned by the five shipping companies to spread the risk.
The first vessel, the 135,000 cu m capacity Al Zubara carrier, has been delivered and is carrying Qatar's first LNG cargo to Japan.
Mitsui Engineering and Shipbuilding Co., Mitsubishi Heavy Industries Ltd., and Kawasaki Heavy Industries Ltd. are to complete construction of the ships by 2000.
Mitsui O.S.K. and Nippon Yusen will own 36.5% of the 10 carriers, Kawasaki Kisen 15%, Showa Line 8%, and Iino Kaiun 4%.
The group said that, given the increasing demand for energy shipping worldwide, it is looking to begin transport services to third parties as well as to Japan.
Qatar LNG
QGPC is a lead partner in three world-class LNG export projects based on development of mammoth offshore North field, believed to hold as much as 240 tcf of gas.
Qatar Liquefied Natural Gas Co. (Qatargas), the first of these, in 1992 agreed to sell Chubu Power 4 million tons/year of LNG for 25 years beginning in 1997. This project's capacty is expandable to 6 million tons/year.
Other partners in Qatargas include Mobil Corp., Total, Mitsui, and Marubeni.
Under construction is Ras Laffan LNG Co., which will supply South Korea's Korea Gas Corp. with about 5 million tons/year of LNG beginning in 2000 (OGJ, Mar. 25, p. 36). The South Korean gas company has an option to buy another 2.4 million tons/year starting in 2000. QGPC and Mobil are partners in Ras Laffan LNG.
The third project, involving a joint venture of QGPC and Enron Corp., is still under negotiation.
In all, the three LNG supply projects, including North development costs, LNG receiving and storage infrastructure, and transportation vessels and facilities, could cost a combined $15 billion.
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