Friday, January 16, 2009

Liquid Natural Gas Plant is Offline in Qatar

By ADAM SCHRECK – 10 hours ago

DUBAI, United Arab Emirates (AP) — Investigators in Qatar are trying to determine what caused a breakdown that has halted about a third of the country's liquefied natural gas output, an official for the plant's operator said Thursday.

The Qatargas I plant has been shut since January 8 because of a "mechanical failure," said the official, who spoke on condition of anonymity, citing company policy. He did not say when supplies would resume.

"We have to take our time to determine what are the root causes. We're waiting for the result of this investigation," he said when asked for a timeframe. "It's important for us to be prudent."

The plant is operated by a consortium led by state-owned Qatar Petroleum and has an annual capacity of 10 million tons. Energy giants Exxon Mobil Corp. and Total S.A. are among the companies that have minority stakes in the facility.

Much of the fuel shipped from the plant is destined for Spain and Japan. The Qatargas official said customers are "aware of what's going on."

The stoppage comes at a time when natural gas supplies to much of Europe are constrained because of a dispute between Russia and Ukraine.

Serene Gardiner, an energy analyst at Standard Chartered Bank in Dubai, said the Qatar shutdown will likely put little added strain on European markets but could eventually affect supplies in big liquefied natural gas importers such as Japan and South Korea.

"Most of the gas in the world goes through pipelines, so in that sense it's small. But if you look at it in terms of LNG, it's quite big," she said of the stoppage. "It's too early to say" what the effect on markets might be, she added.

Qatar, a tiny but wealthy Persian Gulf state, is the world's largest producer of liquefied natural gas. It is investing heavily to boost its production of the fuel, which is formed by cooling regular natural gas to make it easier to transport aboard ships rather than by pipeline.

The country can produce nearly 31 million tons of LNG annually, according to the Qatargas official and the U.S. Energy Information Administration.

No comments: