Qatar's oil minister said Tuesday the total cost of the Barzan development, which will produce natural gas to meet the Gulf Arab state's rising energy needs, will be $10.3 billion, higher than previous estimates.
Qatar's oil minister said Tuesday the total cost of the Barzan
development, which will produce natural gas to meet the Gulf Arab state's
rising energy needs, will be $10.3 billion, higher than previous estimates.
Speaking to reporters on the sidelines of an event in
Doha
,
Mohammed bin Saleh Al Sada said the new figure would include staff and
financing costs.
Barzan, a joint venture between Qatar Petroleum, or QP, and Exxon Mobil Corp. (XOM),
is
Qatar
's
most expensive energy project to date since Royal Dutch Shell's $19 billion
Pearl
gas-to-liquids facility, which comes on stream later this year.
Barzan will supply gas to
Qatar
's
domestic market as a rising population and expanding petrochemical and metals
industries create more demand for energy.
RasGas Co. managing director Hamad Rashid Al Mohannadi told reporters the
original $8.6 billion estimate for Barzan related only to the owner and
engineering, procurement and construction, or EPC, cost.
"The first number related to the EPC cost and the owners cost. The $10.3
billion includes interest, financing and working capital," he said, adding
that financing for Barzan, which will include a mixture of loans, bonds and
equity, was in its "final stages".
Over 30 banks, together with export credit agencies, are expected to play a
role in the complex financing structure for the scheme. Royal Bank of
Scotland
is
the financial advisor on the project.
Al Mohannadi said all the gas produced from Barzan would be used domestically
and there was no plan to export it to the
United
Arab Emirates
via the Dolphin pipeline. By
2014, RasGas will hit a total processing capacity of 11.2 billion cubic feet a
day of natural gas, he added.
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