On January 6, 2011, Qatar Petroleum and ExxonMobil signed a deal that would significantly increase the gas output capabilities of the country. The Barzan Gas Project, located 80km north-east of the industrial city of Ras Laffan, will contribute a further 6.2 billion cubic feet per day (bcf/d) to Qatar’s natural gas reserves, or the equivalent of around 1 million barrels, when completed in 2021. Already the world’s third largest producer, accounting for a third of the total global LNG demand, the Barzan project will serve an ongoing increase in local consumption while “playing a strategically important role in Qatar’s sustainable economic development,“ according to the Minister of Energy and Industry, HE Dr Mohammed Bin Saleh Al-Sada. Moreover, in addition to sales gas, Barzan will produce about 22,000 bpd of field condensate, 34,000 bpd of ethane, 6,000 bpd of plant condensate, 10,500 bpd of propane, and 7,500 bpd of butane.
RasGas, which is co-owned by Qatar Petroleum and ExxonMobil, has been appointed to design, construct, and operate the Barzan Gas Project, which has been dubbed one of the world’s largest and most technologically advanced gas developments.
With the total cost of the project expected to hit $10.3 billion, it will also be the most expansive Qatar has seen since 2006, when Royal Dutch Shell launched the $19 billion Pearl gas-to-liquid plant. According to RasGas, 30% of the necessary funds will be raised through shareholder equity, while the remaining 70% will be obtained through bank loans, $3.5 billion through a commercial bank advance, $850 million through an Islamic finance facility, and a further $2.7 billion from export credit agencies (ECAs).
The project, which will span 3sq km, is set to employ around 20,000 workers on construction, which will be completed over three phases. The first phase will include the first two processing trains of the facility and produce around 1.5 bcf/d. With a completion date set for some time in 2015, phase one of the BGP will boost RasGas’ combined production capacity to 11 bcf/d, making it one of the largest single gas processors in the world. In terms of contracting, the Japan Gas Company (JGC) has been awarded a contract to complete the engineering, procurement, and construction of the onshore operations of the development, whereas South Korea’s Hyundai Heavy Industries (HHI) has been appointed to construct the offshore divisions.
Another key landmark feature of the Barzan Gas Project, which has drawn plaudits from both company and government officials, is its commitment to environmental protection. Namely, recognizing the importance of coral colonies to Qatar’s shoreline, and the effect that offshore pipelines may have on their habitat, the project has pledged to relocate 1,693 of these colonies to a RasGas coral reattachment site. In 2014, the company also ensured a five-year monitoring program to evaluate the success of the reattachments, having relocated 1,000 coral colonies. Furthermore, the project has also introduced a sophisticated waste management facility that aims to recycle up to 80% of all waste generated by the development. In addition to strict controls on all hazardous and chemical materials, the Barzan Gas Project promises to be the biggest and cleanest energy venture on Qatar’s horizon.