In a joint statement issued at the conclusion of an inauguration ceremony held in Doha, Qatar Petroleum
and ExxonMobil Ras Laffan (III) Limited, a wholly owned subsidiary of Exxon Mobil Corporation (XOM)
, announced the launch of Ras Laffan Liquefied Natural Gas Company Limited (RL3).
RL3 is a further expansion of the existing LNG production facilities operated by RasGas Company Limited (Qatar Petroleum 70 percent; ExxonMobil 30 percent) at Ras Laffan Industrial city in North Eastern Qatar. This project is planned to bring the total number of trains operated by RasGas to seven (Trains 1 and 2 in RL, 3 through 5 in RL II and 6 and 7 in RL 3) and is expected to increase RasGas LNG production capacity by more than 70 percent.
Full-chain investment in RL 3 is estimated at near $14 billion. This includes the design, construction and operation of two 7.8 million-ton-per-year (MTA) LNG Trains 6 and 7, and all other facilities associated with the development, production, transportation, processing, treatment, liquefaction, regasification, storage, delivery and sales of approximately 15.6 million tons a year (MTA) of LNG along with associated by-products such as liquified petroleum gas, condensates, helium and sulphur.
The new LNG project, one of the largest ever announced, will be developed in two consecutive phases with Train 6 scheduled to begin production in the second half of 2008, and Train 7 anticipated to come on stream approximately one year later.
Twenty-eight wells are planned to be drilled to supply the two trains with natural gas, sourced from Qatar's giant North Field, which is estimated to contain natural gas resources in excess of 900 trillion cubic feet. LNG from the project will be delivered to targeted markets, principally the United States.
Today's ceremony was attended by H.E. Abdullah Bin Hamad Al Attiyah, Qatar's Second Deputy Premier Minister of Energy and Industry; H.E. Yousef Hussein Kamal, Minister of Finance, Chairman of RasGas Board of Directors; The Honorable Samuel Wright Bodman, U.S. Secretary of Energy; and Mr. Rex Tillerson, President of Exxon Mobil Corporation, along with other dignitaries and senior officials representing both RasGas Company Limited and Exxon Mobil Corporation.
Commenting on this milestone development, H.E. Minister Al Attiyah said, "This project represents another important step under the ambitious vision of His Highness the Emir, Sheikh Hamad Bin Khalifa Al-Thani, that aims to ensure the optimal utilization of the country's hydrocarbon resources by creating development opportunities for the welfare and prosperity of Qatar.
"RL 3 is indicative of the success we have achieved in commercializing our substantial gas resources with our valued partner, ExxonMobil, and we look forward to developing this world class LNG project as we aggressively pursue Qatar's vision to be the world leader for LNG development," H.E. Al-Attiyah said.
"ExxonMobil is extremely proud of our partnership with Qatar Petroleum," said Rex Tillerson. "Working together with our partner Qatar Petroleum and through the application of technology, we have significantly reduced the costs of delivering LNG to world markets. The project will make Qatar Petroleum and ExxonMobil leaders in the supply of this important fuel to the U.S. gas market. A project of this scale is only possible through the combined strengths of two world-class companies, the excellent working relationship that exists between us, and the hard work of everyone involved," Tillerson said.
Earlier this year, Engineering, Procurement and Construction (EPC) contracts for Trains 6 and 7 were awarded to J. Ray McDermott Middle East for the offshore facilities and to the Chiyoda Corporation and Technip France Joint Venture (CTJV) for the onshore work.
RL3 also has signed financing documents securing funds to proceed with execution of the project. In total, $4.6 billion was raised from 19 commercial banks, capital bond market offerings and loans from ExxonMobil. The capital markets portion of the financing ($2.25 billion) represents the largest energy project financing in the history of the capital markets. This was the initial tranche of a broader $10 billion debt program to underwrite the remaining expansions for RL 3 and RL II.
"The State of Qatar is very pleased with the success of this landmark financing and we are well positioned to raise the full $10 billion required for the expansion of RL II and 3 efficiently and at an attractive cost," said H.E. Yousef Hussein Kamal, Minister of Finance.
To deliver the LNG to its targeted markets, RL3 plans to lease 12 LNG tankers to support Train 6 to be constructed by Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries (010140.KS)
. Daewoo will build five tankers, Samsung four and Hyundai three. It is expected that an additional six LNG tankers will be required to support Train 7.