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Gold/Mining/Energy : Gasification Technologies -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (555)	2/20/2007 12:19:30 PM
From: Dennis Roth	Respond to of 1740

Qatar, Exxon drop gas project due to high costs Tue Feb 20, 2007 12:06pm ET yahoo.reuters.com By Odai Sirri DOHA, Feb 20 (Reuters) - Qatar Petroleum and ExxonMobil (XOM.N: Quote, Profile , Research) have dropped plans to build a gas-to-liquids plant in Qatar due to spiralling costs, the country's energy minister said on Tuesday. But Abdullah al-Attiyah said other projects in Qatar were not under threat and that ground would be broken on Thursday for a multi-billion-dollar GTL plant with Royal Dutch Shell (RDSa.L: Costs for that facility, which processes gas into refined products that are market-ready, have risen to as much as $18 billion from a 2003 estimate of around $5 billion. The Exxon/QP GTL scheme, signed in 2004, had an initial budget of $7 billion. "GTL technology is expensive and very technical," Attiyah said. "Technology for the other projects is proven...No other projects are under threat." GTL plants process gas into clean oil products like low sulphur diesel, demand for which is growing on the back of tougher limits on emissions. The Exxon/QP GTL plant was to have pumped 154,000 barrels per day (bpd). QP has offered Exxon a role in the development of the Barzan gasfield, part of the country's vast North Field -- the largest reservoir of non-associated gas in the world. QP also offered Exxon rights to participate in any future development at Barzan. "We need the gas," Attiyah said. He said it was too early to estimate the development cost of Barzan, which will pump 1.5 billion cubic feet per day of gas from 2012 to meet demand from the country's rapidly growing domestic market. "We are pleased to have been the only international oil company selected to participate in the Barzan Project and look forward to continuing our successful partnership with Qatar Petroleum," saidStuart McGill, Senior Vice President of Exxon, in a statement released in the United States. A flurry of gas projects in Qatar have inflated labour and raw material costs, exacerbated by rising costs globally across an oil and gas industry straining to bring new capacity online to meet rapidly rising demand for energy. ExxonMobil, the biggest foreign investor in Qatar's energy sector, also has stakes in Qatar's huge Rasgas and Qatargas liquefied natural gas projects. Qatar is home to the world's third largest gas reserves after Russia and Iran. © Reuters 2007. All Rights Reserved.

To: Dennis Roth who wrote (555)	2/20/2007 2:17:58 PM
From: Dennis Roth	Respond to of 1740

Exxon, Qatar Abandon $7 Billion Gas-to-Liquids Plant (Update3) bloomberg.com By Joe Carroll Feb. 20 (Bloomberg) -- Exxon Mobil Corp. and Qatar's state- run oil and gas company abandoned plans for a $7 billion project that would have been the world's biggest plant for producing gasoline ingredients and diesel from natural gas. Exxon's withdrawal leaves Royal Dutch Shell Plc as the only major international energy company with plans to convert gas to liquid fuels in Qatar, home to the world's largest gas field. Shell's project has been beset by escalating costs that may push the final price tag to $18 billion. Rising prices for pipe, drilling equipment, valves and workers worldwide have boosted expenses for energy companies and forced some producers such as Shell and Chevron Corp. to postpone projects. In lieu of the gas-to-liquids plant, Exxon agreed to develop the country's Barzan gas field to serve domestic demand, spokeswoman Jeanne Miller said today. Terms were not disclosed. ``We are going to see more and more cost-containment struggles like this around the world,'' said Robert Sweet, who helps manage $110 million, including Exxon shares, at Horizon Investment Services LLC in Hammond, Indiana. ``While this is a short-term setback for Exxon, I expect they will be a big player in this sort of project going forward.'' Shelving the gas-to-liquids project won't have any effect on Exxon's reserves, spokesman Gantt Walton said today. The company last week said its reserves rose by the equivalent of 2 billion barrels of oil in 2006, partly because of additions in Qatar. `Steel in the Ground' The Barzan field is expected to begin pumping 1.5 billion cubic feet of gas a day for Qatar's domestic market in 2012, Miller said. Exxon, the world's largest oil company, and Qatar agreed in 2004 to build a gas-to-liquids plant that would have produced 154,000 barrels of diesel, naphtha and lubricants a day. That agreement will be allowed to expire in July, Miller said. ``A decision was made to stop further development and not progress work or discussions of commercial agreements,'' Miller said today in a telephone interview. Shares of Exxon fell 79 cents, or 1.1 percent, to $74.50 as of 1:31 p.m. in composite trading on the New York Stock Exchange. As recently as September, Exxon Chief Executive Officer Rex Tillerson said the Qatar gas-to-liquids project was moving forward and that he was looking for ways to limit cost increases. ``Everybody in the industry is facing the problem of big cost increases,'' said Bernard Picchi, an analyst at Wall Street Access in New York who doesn't own or rate Exxon shares. ``Anything that involves putting steel in the ground is dramatically more expensive than it was two or three years ago.'' `Radio Silence' Exxon's gas-to-liquids facility, which was slated to begin output in 2011, would have been larger than Shell's planned 140,000-barrel-a-day Pearl plant. The Shell project is scheduled to open in 2009. Exxon would have been responsible for 100 percent of the cost of the gas-to-liquids plant. Output would have been 50 percent diesel, 20 percent lubricants, and 30 percent naphtha and other components used to make gasoline. Picchi said he suspected the Exxon project was going to be canceled because the company said little about it since the initial agreement was signed in 2004. ``This would have been one of the biggest projects ever committed to by Exxon and when a company signs up to something like that they generally give updates every month or so,'' Picchi said. ``But Exxon's been observing radio silence on this for more than two years. That led me to conclude they had all but given up on it.'' LNG Preserved South Africa's Sasol Ltd. has been producing liquid fuels from natural gas in Qatar at a 34,000-barrel-a-day plant since July. Exxon's worldwide 2006 sales of $377.6 billion were 38 times larger than Sasol's. A telephone message left for Qatar Petroleum spokesman Abdullah Al Kuwari in Doha was not returned. Exxon owns a 30 percent stake in four liquefied natural gas plants in Qatar under a joint venture with state-owned energy companies. The venture plans to open one new LNG plant this year and two more in 2008. Abandonment of the gas-to-liquids project will have no effect on Exxon's LNG projects in Qatar, spokeswoman Miller said. To contact the reporter responsible for this story: Joe Carroll in Chicago at Jcarroll8@bloomberg.net . Last Updated: February 20, 2007 13:32 EST

To: Dennis Roth who wrote (555)	2/21/2007 6:25:13 AM
From: Dennis Roth	Respond to of 1740

Exxon cancels gas-to-liquids project in Qatar Financial Times msnbc.msn.com By Ed Crooks in London Updated: 2:10 a.m. ET Feb 21, 2007 ExxonMobil has scrapped plans for a multi-billion-dollar gas-to-liquids (GTL) project in Qatar that would have converted natural gas into fuel, lubricant and chemical feedstocks. The cancellation is the biggest setback yet for GTL technology, which its backers hope will be an important source of road fuel and petrochemical products in the next decade. Exxon will instead join in a project developing gas for the domestic market in Qatar. When the first agreement between Exxon and Qatar was signed in July 2004, the GTL project's estimated cost was $7bn. Since then, costs across the industry have risen sharply, threatening its profitability. Rajnish Goswami of Wood Mackenzie said: "GTL is feeling the impact of higher costs more because it is a nascent technology." The GTL plant, a joint venture between Exxon and Qatar Petroleum, was planned to come on stream after 2009 and would have produced 154,000 barrels of oil equivalent per day. Exxon said the decision to abandon it was consistent with its investment approach, "which focuses on maximising the value of the resources for both the host government and our shareholders". The Qatar project was Exxon's only active involvement in a GTL plant. However, it said it would continue to look for alternative opportunities for the technology in which it had invested $600m over two decades and taken out 3,500 patents. There is also a rapidly rising demand for gas in Qatar, which has one of the world's fastest-growing electricity generation sectors, using gas-fired power stations. It holds the world's third-largest gas reserves but the government has imposed a moratorium on new developments. In place of the GTL plant, Exxon and Qatar Petroleum are to develop the Barzan gas field, producing 1.5bn cu ft of gas per day for the domestic market, starting in 2012. That output is roughly equivalent to Qatar's entire gas consumption in 2005. Exxon's decision does not affect Royal Dutch Shell's Pearl GTL project, which was given its final approval last July. There will be an official ceremony at the plant tomorrow to mark the start of construction. Shell has indicated that it expects the project to cost $12bn-$18bn over its lifetime, producing 3bn boe in total, working out at $4-$6 per barrel, which it argues compares well to conventional sources of oil. Oryx, another GTL project that is a joint venture between Sasol of South Africa and Qatar Petroleum, produced its first final product at the end of last month. Copyright The Financial Times Ltd. All rights reserved.