Qatar Petroleum & ExxonMobil Ink LNG Supply Deal

Qatar Petroleum and ExxonMobil Corporation have signed a Heads of Agreement (HOA) to supply liquefied natural gas (LNG) from Qatar to the United States, for a term of 25 years. This announcement was made by His Excellency Abdullah bin Hamad Al-Attiyah, Qatar's Second Deputy Premier and Minister of Energy and Industry joined by Harry Longwell, Director and Executive Vice President, Exxon Mobil Corporation, at a ceremony today in Doha.

The HOA covers the development of two large LNG trains with combined capacity of 15.6 million tonnes per annum (MTA) of LNG or about 2 billion cubic feet (bcf) per day to be supplied by Ras Laffan Liquefied Natural Gas Company (II). The feed gas for these trains will be sourced from Qatar's giant North Field, which has proven natural gas reserves in excess of 900 trillion cubic feet (tcf). Over 26 tcf of the reserve will be dedicated to this project. Downstream of the plants the parties will be acquiring necessary transportation capacity and developing regasfication capacity in the U.S. Total estimated investment including ships is about $12 billion.

The project is the largest LNG import project that has been announced for supplying gas to the U.S., and makes Qatar Petroleum and ExxonMobil leaders in supplying the important U.S. natural gas market. Delivery of LNG to the U.S. is targeted to begin in 2008/2009 and will extend for over 25 years. Several locations are currently under evaluation for developing a receiving terminal and permitting process will be initiated in the fourth quarter of 2003.

The LNG trains will be built at Ras Laffan Industrial City in Qatar by RasGas (II), a joint venture company between Qatar Petroleum and ExxonMobil that has been operating since 2001. Two existing trains currently produce over 6 MTA of LNG and two additional trains of 4.8 MTA each, are under construction. Qatar Petroleum will have a 70% equity interest in the project, and ExxonMobil 30%.

In his statements at the HOA signing ceremony, Second Deputy Prime Minister Al-Attiyah said: "This important agreement to supply LNG to the U.S. markets is a major achievement for the State of Qatar and highlights another successful joint effort between Qatar Petroleum and ExxonMobil. The strength of Qatar Petroleum and ExxonMobil establishes an ideal partnership to meet the challenge of supplying the growing energy requirements of the U.S. This long-term LNG supply agreement builds on Qatar's valued and strong relationship with the U.S. "

Qatar's Minister of Finance and RasGas Chairman, H.E. Yousef Kamal, further stated: "This is a giant step for RasGas and represents the largest agreement for the Company. It is undoubtedly a giant boost to our efforts to become an industry pace setter."

Harry Longwell said: "The National Petroleum Council in the United States has just published the results of a study that indicates the U.S. will need to import more gas to meet expected future demand and this project will be a valuable contribution to those balances". Mr. Longwell went on to say, "This is a huge, world-scale project with many technological firsts for the U.S. market which has been under consideration for over a year. This project demonstrates the impressive capabilities of the Qatar Petroleum – ExxonMobil partnership. We are immensely proud of this partnership and we will continue to explore other business opportunities with Qatar Petroleum and the State of Qatar."