Qatar has reached a 12-billion-dollar deal with ExxonMobil, the world's biggest oil company, to supply liquefied natural gas to Britain by 2007, Energy Minister Abdullah bin Hamad al-Attiyah said.
Qatar Petroleum and ExxonMobil Corporation are going ahead with "the 12-billion-dollar Qatargas II project, which will supply LNG from Qatar to the United Kingdom by the winter of 2007-2008," Attiyah told reporters.
Attiyah, who also chairs Qatar Petroleum, made the announcement at a joint news conference with ExxonMobil's director and executive vice president Harry Longwell, calling it "the biggest deal in the history of the hydrocarbon" industry.
State-run Qatar Petroleum has a 70 percent stake in Qatargas II while ExxonMobil holds the remaining 30 percent, a statement said.
It said contracts worth some 4.5 billion dollars had been signed for the construction of platform topsides, pipelines and two LNG trains at Ras Laffan Industrial City in Qatar in connection with the project.
A total of 7.6 billion dollars was raised from 57 institutions, "the largest energy project financing ever and the first ever financing on a full LNG chain-integrated basis," according to Faisal al-Suwaidi, vice chairman and CEO of Qatargas II.
"Working together with our partner ExxonMobil, we have been able to significantly reduce the costs of delivering LNG to the UK and so create a strong financeable project," Attiyah said.
The statement said two new companies had been formed to manage the LNG importation, terminal operations and sales of natural gas to ExxonMobil Gas Marketing Europe, which will in turn sell it to UK markets.
Qatar Petroleum and affiliates own 70 percent of the two firms while ExxonMobil or affiliates of the US oil giant own the rest.
The statement said the agreements announced Wednesday were extensions of a 2002 heads of agreement between the two sides for development of two LNG trains to supply gas to Britain.
The feed gas for the two trains will be sourced from Qatar's giant North Field, which has proven reserves of more than 900 trillion cubic feet (25 trillion cubic meters), the third largest in the world.
It amounts to more than 15 percent of the world's total proven gas reserves, and is enough to last the tiny Gulf state about 250 years.
Doha plans to boost annual LNG production to 60 million tonnes by 2010 from the current 18 million as part of an all-out push to become the world's biggest LNG exporter and a global energy giant.