ExxonMobil Inks Deal To Supply Qatari Gas

ExxonMobil Middle East Gas Marketing Limited, the Kuwait Petroleum Corporation and Qatar Petroleum have signed a Term Sheet outlining key commercial terms that will set the basis for a definitive Sale and Purchase Agreement (SPA) to be negotiated over the coming months.

This followed the signing today in Doha of the Protocol for Gas Sale and Purchase Agreement by HE Dr. Adel Khalid Al Sabeeh, the Minister of Oil of Kuwait and Chairman of KPC, and HE Abdulla bin Hamad Al Attiyah, the Minister of Energy and Industry of Qatar and Chairman of QP. This Protocol establishes the general framework for finalizing the sale of pipeline gas to Kuwait.

"Today we have achieved a major milestone in reaching commercial agreement to supply Kuwait with Qatari gas for 25 years, beginning in 2005," said Mr. Harry J. Longwell, Director and Executive Vice President of Exxon Mobil Corporation.

"ExxonMobil is pleased to play a significant role in Qatar's diversification into regional gas exports. We are proud of the progress we have made together with our partners, and we look forward to jointly finalizing and signing the SPA as soon as possible."

At today's signing ceremony, HE Dr. Adel Khalid Al Sabeeh said that gas is needed to meet the rising demand for power and other future energy demands in Kuwait. "This historical achievement represents a major step forward towards enhancing the already strong relations and economic ties between the two countries."

HE Abdulla bin Hamad Al Attiyah extended appreciation to the joint efforts to achieve today's milestone. "The delivery of gas to Kuwait via pipeline will set an important precedent for regional gas cooperation and meet Qatar's strategic plan for ongoing utilization of the country's massive gas reserves," he said. The gas to be supplied to Kuwait will be produced from the Enhanced Gas Utilization (EGU) project, which will be operated by ExxonMobil in Qatar's North Field. Nominal capacity of the EGU is 1.75 billion cubic feet per day (bcfd).

The signing of the Protocol and the Term Sheet follows the agreement in principle reached on January 10, 2002 between KPC, QP and ExxonMobil. A Statement of Intent was signed in May 2000 between Kuwait and Qatar, and the Memorandum of Understanding was signed in July 2000 between KPC, QP and ExxonMobil.

ExxonMobil is the world's largest non-government marketer of equity natural gas, with total equity sales of 10 bcfd, and total natural gas sales of 17 bcfd. The company has access to substantial gas resources in both established gas fields and new gas projects. Net discovered resources total more than 180 trillion cubic feet (tcf), including 56 tcf of proved gas reserves, providing a solid platform for profitable growth.