South Pars Field / Ras Laffan Deal Plans Firm Up

Russia’s gas monopoly Gazprom, Qatar Liquefied Gas Company Ltd. and National Iranian Oil Co. will set up a venture to produce gas from Iran’s South Pars field and liquefy it at Qatar’s Ras Laffan. Each founder will get 30 percent in the project and the remaining 10 percent will go to the trader, probably to China’s CNPC or Korean Kogas. The experts say Qatar’s participation will level political risks triggered by the sales of Iranian gas.

The engineering committee of gas trio, which establishment Russia, Iran and Qatar announced in late October, meets today in Qatar’s Doha. Russia is represented by Alexander Medvedev, deputy head of Gazprom’s management committee and general director of Gazprom Export.

Although the agenda hasn’t been announced officially, a source with Russia’s government said that the matter at stake is creating a venture, where the state-controlled companies of Russia, Qatar and Iran will have 30 percent each. The plans are to set up the gas production infrastructure in South Pars (world biggest gas field with resources of 14 trillion cu meters), lay a pipeline via the bottom of the Persian Gulf to Qatar, and construct there, in Ras Laffan province, a liquefied gas plant.

The remaining 10 percent in the venture will go to the fourth partner, which hasn’t been chosen yet. A source with Gazprom confirmed the information, specifying that the fourth party will be picked out depending on the gas sales market.

Qatar sold 38.5 billion cu meters of gas in 2007; the major clients were Japan (10.9 billion), South Korea (10.8 billion), India (8.3 billion), Spain (4.5 billion), Belgium (2.8 billion). Qatar has recently inked a contract with China for the annual supplies of 7 million tons of LNG, and the gas of new venture will probably go exactly to that country. On the other hand, gas consumption is stepping up in Korea, so the fourth partner in the project could be either Chinese CNPC or Korea’s Kogas.

- Copyright 2008, Commersant.

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