Qatar Petroleum and ConocoPhillips Agree to Develop LNG Project

Qatar Petroleum and ConocoPhillips has signed a Heads of Agreement for the development of Qatargas 3, a large-scale liquefied natural gas (LNG) project located in Qatar servicing the U.S. natural gas market. The signing ceremony took place at the Qatari Embassy in Washington, D.C., and was attended by Qatar's Minister of Energy and Industry and Chairman of Qatar Petroleum H.E. Abdullah Bin Hamad Al Attiyah, U.S. Secretary of Energy Spencer Abraham, and ConocoPhillips President and Chief Executive Officer Jim Mulva. The agreement provides the framework for the necessary project agreements and the completion of key feasibility studies. "We welcome this prospect of a long-term partnership with ConocoPhillips," said H.E. Al Attiyah. "World-scale projects such as these are crucial to the continued long-term economic development of Qatar." H.E. Al Attiyah added, "Our strategy is to diversify our market portfolio and the U.S. market being, not only the largest gas market in the world but also the most liquid market, is an important step in that direction." Mr. Mulva said, "Qatar's abundant gas resources can provide a secure and much-needed long-term supply for the growing U.S. gas market before the end of the decade. In keeping with ConocoPhillips' strategy, this project will be a significant near-term addition to our portfolio, enabling our company to be a major player in helping to meet the growing worldwide demand for clean energy." Secretary Abraham said, "One of the clear messages from President Bush's National Energy Policy is that U.S. energy security depends on sufficient energy supplies to support U.S. and global economic growth. The world's natural gas resources, including liquefied natural gas (LNG), will contribute to the U.S. supply of the future and help ensure our energy security. "I offer my congratulations to both ConocoPhillips and to Qatar in reaching this agreement, and I wish both parties success with their project as it moves forward." Qatargas 3 is to be an integrated project, jointly owned by Qatar Petroleum and ConocoPhillips. It is to consist of the facilities to produce gas from Qatar's North Field, yielding about 7.5 million tons of LNG per year, in a new, first-of-class LNG train to be constructed at Ras Laffan Industrial City. The LNG will be shipped from Qatar in a fleet of state-of-the art LNG carriers. ConocoPhillips will purchase the LNG and be responsible for regasification and marketing within the United States. Average daily sales volumes are expected to be approximately 1 billion cubic feet per day. Startup is presently anticipated to be in the 2008-2009 timeframe. Optimization of all aspects of the project will be achieved under the feasibility studies required by the Heads of Agreement.