TOKYO, 22 December 2005 — Engineering firms Chiyoda of Japan and Technip of France signed a $4 billion deal yesterday to jointly build liquefied natural gas (LNG) facilities in Qatar. It is the latest massive construction project in the tiny Gulf emirate, which is on a drive to become the world’s top LNG producer at a time when consumers are looking for alternatives to costly oil. The project is for two “trains” — units where gas is liquefied — capable of producing 7.8 million tons of LNG a year by the end of the decade, with North America a primary market for the gas, Yokohama-based Chiyoda said.
Construction would begin in February or March, Hiroshi Kobayashi, senior executive vice president of Chiyoda, told a news conference. “My understanding is that the project of 500 billion yen ($4 billion) is the biggest project in our business. The Technip side has the same understanding,” Kobayashi said.
A statement said that with the latest contract, “the Chiyoda Technip joint venture is now responsible for building the world’s six largest LNG trains, all of which are key to Qatar’s strategic plan to become the largest global LNG supplier.”
The contract was signed with Qatar Liquefied Gas Co. Ltd, with Chiyoda holding a 60 percent stake and Technip the remaining 40 percent.
Chiyoda said it foresaw growing demand for LNG in the decades to come, with production not only in the Middle East but in South America and Africa. “To give a sense of the changing demand, the global trend is that the demand for gas is increasing by nearly 10 percent per year and that for LNG is higher,” Kobayashi said. “It won’t be a big mistake to say that in 10 and 20 years, the current (global) supply of 130 million ton production could increase to 200 million tons in 2010 and 300 million tons in 2020,” he said.
Qatar has launched an industrial drive to become the world’s top exporter of LNG. It has seen growing interest amid skyrocketing prices for the region’s better-known commodity, oil.
Last month US Energy Secretary Samuel Bodman signed a 25-year accord starting in 2008 under which Washington would import 25-30 percent of its LNG needs from Qatar. In the $14 billion strategic alliance, Qatar and Washington are building the world’s largest LNG plant. It has two trains, the first of which will be operational from the second half of 2008.
Qatar’s giant North Field, which has proven reserves of more than 900 trillion cubic feet (25 trillion cubic meters) of natural gas, is the third largest in the world.