Qatargas 4 LNG Start Up Delayed By at Least One Year, BASF Says

By Ayesha Daya

Feb. 11 (Bloomberg) -- Qatar, the world’s biggest exporter of liquefied natural gas, and Royal Dutch Shell Plc, will probably delay the start of their Qatargas 4 LNG project by at least a year until 2011, an official working on the project said.

“Qatargas 4 won’t be ready before 2011 or 2012,” Nawid Kashani-Shirazi, senior process manager of gas treatment at BASF SE, which is handling process technology licensing for parts of the plant, said in an interview in Abu Dhabi yesterday.

Qatar is building a series of gas export facilities, the biggest of their kind, that are all suffering delays as the nation considers the demands on its gas fields and the cost of building complex projects simultaneously.

“Qatargas 2 has been in commissioning phase for the past two months, and the first drop of LNG is expected this month, and Qatargas 3 is planned to start sometime in the first half of next year,” Kashani-Shirazi said, while attending The Energy Exchange’s Gas Arabia conference.

State-run Qatar Petroleum is the majority shareholder in four projects operated by Qatargas Operating Co. in partnership with various foreign oil companies. The 7.8 million tons-a-year Qatargas 4 facility, in partnership with Shell, was expected to begin supplying LNG to the U.S., Europe, China and Dubai at the end of the decade, according to its owners.

The first project, Qatargas 1, has been in operation since 1996, consisting of three production units, or trains.

The next, Qatargas 2, is building two trains in partnership with Exxon Mobil Corp. and Total SA. It was scheduled to start in 2008 and faced contracting delays, Saad Sherida Al Kaabi, the head of gas ventures at state-owned Qatar Petroleum, said last month.

Labor, Equipment

A shortage of labor and equipment is stalling work. Shell’s nearby Pearl project, which is building a facility to turn gas into liquid fuels, employs 40,000 construction workers alone.

Qatargas 3, a venture between Qatar Petroleum and ConocoPhillips due to start late this year, was postponed to 2010 because of industry shortages, Ryan Lance, Conoco’s president of exploration and production, said last November.

Shell Chief Financial Officer Peter Voser said on a Jan. 29 conference call that Qatargas 4 was “within the kind of framework we have set ourselves, both in terms of budget and timing.”

“The schedule is broadly in line with the timings discussed at the time of launch in 2005,” Shell spokeswoman Kirsten Smart said by phone from The Hague yesterday when asked about Qatargas 4. “Supplies are expected to commence at the end of the decade.”

Qatar Petroleum officials couldn’t immediately be reached for comment by phone. BASF, the world’s largest chemical company, is based in Ludwigshafen, Germany.

To contact the reporter on this story: Ayesha Daya in Abu Dhabi at adaya1@bloomberg.net