CAPITAL: Doha

MONETARY UNIT: Riyal

REFINING CAPACITY: 57,500 b/d

OIL PRODUCTION: 622,900 b/d

OIL RESERVES: 3.7 billion bbl

GAS RESERVES: 300 tcf

The Doha government announced in February 1998 it would proceed with plans to build a $1 billion gas pipeline from its supergiant North field to Jebel Ali, Dubai, despite competition for gas supply from Abu Dhabi.

The Ministry of Energy & Industry said that besides feeding two liquefied natural schemes and a planned gas-to-liquids project in Qatar, the field would also be used to provide gas for several industries after 2005 in the free trade zone of Jebel Ali. The Qatar-Jebel Ali gas pipeline was being viewed as the first step in a proposed 1,330 km Gulf Cooperation Council gas grid.

Maersk Olie & Gas AS, Copenhagen, worked in 1998 to increase production in the offshore Al Shaheen oil field, where it is operator, to 150,000 b/d from the 1997 average of 88,100 b/d.

Maersk had already drilled 24 horizontal wells in the field and set out on a 4-year program to increase the number of horizontal wells to 63, which would be production and water injection wells.

A study by Fesharaki Associates and Asia Pacific Energy Consulting showed that Qatar was set to become a major producer of condensate, almost trebling its output by 2005.

The researchers said condensate output from the country`s two liquefied natural gas projects would amount to 220,000 b/d by 2005, compared with output in early 1998 of 50,000 b/d from the Qatargas LNG scheme.

In April Qatar`s first lubricants blending plant was brought on stream by Qatar Lubricants Co. The plant was built 40 km south of Doha at Mesaieed.

The plant, with capacity to produce 20,000 metric tons/year of lubricants, was said to be able to produce the full range of lubricants. Qatar`s lubricants demand was estimated at 15,000 tons/year. It was previously met by imports.

Upstream agreements

Qatar General Petroleum Corp. (QGPC) signed a production sharing agreement with Chevron Corp. in March covering the 10,900 sq km onshore Block 2 to the east of Dukhan field.

Chevron was outright interest holder in the block and committed to carry out 2D and 3D seismic surveys by the end of 1998 with exploration drilling to follow during 1999-2001.

QGPC announced in May that it intended, along with its foreign joint venture partners, to invest $4.5 billion by 2001 in developing new oil reserves.

A Ministry of Energy & Industry official said the country had spent more than $10 billion since 1992 for development of projects using gas from North field.

QGPC studies showed that estimated oil reserves in the country stood at more than 10 billion bbl in 1998-8.64 billion bbl in offshore concessions and 1.4 billion bbl onshore-compared with 3.7 billion bbl in 1995.

The state firm said the $4.5 billion would be invested in new and existing concessions. Three new areas would be opened up for exploration and production besides new developments in producing blocks offshore and onshore. Foreign partners in these ventures would be Occidental Petroleum Corp., Maersk Olie & Gas AS, and Elf Aquitaine SA.

QGPC also intended to boost its position as a petrochemicals producer over 4 years with the completion of four gas-based petrochemicals plants under a $3 billion program.

The first of the plants was intended to begin production in late 1999. The four plants were to produce ethylene dichloride, polyvinyl chloride, vinyl chloride monomer, methanol, and methyl tertiary butyl ether.

QGPC began work in September to increase oil output from the Bul Hanine concession, one of Qatar`s oldest licenses in production, by installation of a three-phase separator.

Local contractor Mideast Constructors (Mecon) began installing the plant in the offshore block`s PS-3 platform, which handles crude oil, condensate, and associated gas from the block`s fields, brought on stream in 1969.

Earlier in the year QGPC let a $27.4 million contract to Mecon to install a topsides upgrade module on PS-3. This was intended to be carried out with 45 days during the platform`s maintenance shutdown.

Al the same time Abu Dhabi`s National Petroleum Construction Co. installed a wellhead platform and a processing platform in Al Shaheen field offshore Qatar for operator Maersk Oil Qatar.

GAS to liquids

Weak oil prices in the latter half of 1998 also forced Sasol Ltd., Johannesburg, to reconsider its plan to build a $550 million gas-to-liquids plant to utilize gas from North field.

The proposed two-train plant was conceived with the aim of producing 20,000 b/d of low sulfur diesel and aromatics from gas feedstocks. It was seen as a landmark for the rebirth of the synthetic fuels industry based on the Fischer-Tropsch process developed in World War II.

George Couvras, managing director of Sasol Synfuels International, said, "We hope to slash capital and operating costs by synergizing with existing and future infrastructure facilities at Qatar`s Ras Laffan industrial city.

"The technical and marketing side of the project has been completed. Now we are just waiting to consolidate the financing of the project, and we are investigating different options."

In December Qatar`s Ras Laffan LNG Co. planned to used produced gas to test offshore facilities in North field installed to deliver gas to the Ras Laffan liquefaction and export project.

Onshore testing with gas from the field was scheduled to take place in early 1999. The joint venture was building two liquefaction trains under a $3.4 billion program, with the intention of adding three further trains at a later date.

Earlier in the year the Qatar Liquefied Gas Co. (Qatargas) joint venture, which was already producing LNG at Ras Laffan, brought on stream a third liquefaction train, taking Qatargas`s total capacity to 6 million metric tons/year of LNG. The venture expected to be able to boost output rapidly to 7.2 million tons/year without further investment, based on its experience of operating the plant.

The Qatargas consortium planned to install additional production platforms in North field by year-end to provide feed gas for the new train. The third train, a 2 million ton/year unit, was estimated to cost $600 million, while the additional production facitilies were anticipated to cost $300 million.

In December 1998 the Qatar Vinyl Co. (QVC) let a $430 million contract to Krupp Uhde, Essen, and Technip SA, Paris, for design and construction of a petrochemicals complex at Umm Said, Qatar.

The plant was slated for completion in the summer of 2001, with capacity to produce 175,000 tons/year of ethylene dichloride, 230,000 tons/year of vinyl chloride monomer, and 290,000 tons/year of caustic soda. It was to incorporate a 160 MW power plant.

The plant`s ethylene feedstock was intended to come from a neighboring plant owned by Qatar Petrochemical Co., a shareholder in QVC along with Qatar General Petroleum Corp., Norsk Hydro AS and Elf Atochem SA.