State-run Qatar Petroleum (QP) and Royal Dutch/Shell Thursday sealed a five- to six-billion-dollar deal to build the world's biggest plant to convert natural gas into liquid fuels.
Qatari Energy Minister Abdullah Hamad al-Attiya, who is also QP chairman, signed the agreement with Shell's Group Managing Director Malcolm Brinded, the official QNA news agency reported.
The accord, which follows a heads of agreement inked last October, envisages the construction of a gas-to-liquid (GTL) plant at Ras Laffan in the Gulf desert emirate to produce naphtha and environmentally friendly diesel fuels.
According to a statement carried by QNA, output of 70,000 barrels per day is targeted by 2009, rising to 140,000 bpd by 2011.
Gas-rich Qatar has a series of GTL mega-projects in the pipeline with oil majors, who also include Exxon Mobil, Marathon, ConocoPhillips and Sasol-Chevron.
In March, QP signed a six-billion-dollar memorandum of understanding with Sasol-Chevron for three GTL projects.
Last October, QP signed a heads of agreement for a 25-year term with Exxon Mobil to supply the growing US domestic market. Doha and foreign partners have already pumped 15 billion dollars of LNG ventures into Qatar's North Field, the world's largest non-associated gas field.
It has proven reserves of over 900 trillion cubic feet, or 25.485 trillion cubic metres. That is more than 15 percent of the total proven global gas reserves, and enough to last the tiny Gulf state about 250 years.