Royal Dutch Shell Group .com

The New York Times: Shell Signs Gas Field Development Deal: Posted Thursday 22 December 2005

Published: December 21, 2005
Filed at 11:15 a.m. ET

AMSTERDAM, Netherlands (AP) -- Royal Dutch Shell PLC said Wednesday it has signed a deal with Qatar Petroleum to tap into the huge natural gas fields in the Persian Gulf, and is acquiring more pipeline capacity in the United States to channel the gas to the U.S. market.

The Qatargas 4 project will produce 1.4 billion cubic feet per day of natural gas from Qatar's North Field over the next 25 years, Shell said. The project includes a liquefaction plant and shipping capability.

The project will be 70 percent owned by Qatar Petroleum and 30 percent by Shell. Most of the liquid natural gas will be delivered to North America, beginning around the end of the decade, the company said.

Exxon Mobil Corp. and the French energy company Total SA were earlier investors in the development of Qatar's natural gas reserves, among the world's largest.

At the other end, Shell also announced an agreement with a subsidiary of El Paso Corp. to acquire more capacity at the Elba Island LNG terminal in Georgia.

It also reached agreement with another El Paso Corp. subsidiary, Elba Express Pipeline Company LLC, to acquire capacity in a new natural gas pipeline.

Both projects will be filed with the U.S. Federal Energy Regulatory Commission for approval in the third quarter of 2006, Shell said.

''The project will contribute to Shell's goal of growing our natural gas production and reserves position, as well as to increased security and diversity of natural gas supply to North America,'' Linda Cook, Shell's executive director of gas and power, was quoted by the company as saying in Doha, where the contract was signed.

Shell, the world's third-largest publicly traded oil company, has been under investor pressure to explore new resources after disclosing in 2004 that it had overstated its proven reserves of oil and gas.

Shell said its 2004 gas sales were around 10.2 million tons from projects in Nigeria, Malaysia, Brunei, Oman and Australia, and the addition of Qatargas 4 would help the company double its gas capacity by the end of the decade.

Click here to return to HOME PAGE

Click here to return to Royal Dutch Shell Group .com