Qatar, Bahrain gas deal on track

22 March 2002

Qatar and Bahrain are expected to sign by the third quarter of 2002 a heads of agreement (HoA) for the delivery of North field gas to Manama (MEED 11.1:02).

'We will be supplying lean gas. Talks are on schedule,' a Qatar Petroleum (QP) official said in Dubai on 19 March. 'We are discussing the volume of gas and the pipeline options.'

In early January, Qatar and Bahrain signed a memorandum of understanding, which provides for the two parties to carry out a joint utilisation study and conclude an HoA. The gas volumes are still to be finalised; Doha has in the past talked of delivering 500 million cubic feet a day (cf/d) to Bahrain.

Qatar has two options to supply gas to Bahrain. The first will be through the construction of a 'spur' from the proposed Qatar-Kuwait gas pipeline. The other option will be the construction of an 'independent' pipeline. 'The economies of scale will be a decisive factor,' the QP official said.

Gas is intended to be sourced from the enhanced gas utilisation (EGU) project, planned by QP and the US' ExxonMobil Corporation.

EGU will also be the source for the proposed Qatar-Kuwait gas pipeline. On 14 January, QP, ExxonMobil Gas Marketing, part of ExxonMobil, and Kuwait Petroleum Corporation announced an agreement in principle setting up the framework for a gas sales and purchase agreement (SPA - MEED 18:1:02).

'We look to signing an SPA [with Kuwait] by the summer,' the official said. The proposed pipeline will transport between 800 million and 1,400 million cf/d of lean gas from Ras Laffan to Al-Zour in southern Kuwait. Construction of the 590-kilometre subsea line will take about three years.

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