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Qatar signs US$8.6 billion gas deal with Exxon Mobil


Qatar and Exxon Mobil have agreed to jointly develop the much delayed Barzan gas project at a cost of US$8.6 billion and will supply 1.4 billion cubit feet of gas.

The project will be located in Ras Laffan industrial city and will be operated by RasGas, processing gas from Qatar's north field to supply power stations and industries in the Gulf state.

The project is expected to produce 1.4 billion cubic feet of North Field gas a day, which will be used to meet the growing demand of the domestic market. The first train will start in 2014 and the second in 2015.

State-run Qatar Petroleum reportedly has a 93 per cent stake, and oil major Exxon Mobil owns the remaining share. Qatar had initially held back on the project due to high construction costs in 2010, Energy Minister Abdullah al-Attiyah revealed in a press conference, reported Reuters.

"We had to hold back because in 2010 the tender was for US$11 billion, and now we managed to save US$2.4-2.5 billion by having it this year. It took about 18 months from that point to finalise the deal," said al-Attiyah.

Qatar produces about 2.8 billion cubic feet of gas per day for the domestic market and plans to increase that amount to 4 billion by 2015.