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Exxon gas project foundered on Qatar ‘domestic demand’ Published

Qatar’s domestic demand for natural gas was one reason ExxonMobil Corp abandoned a gas-to-liquids export project in the country, World Gas Intelligence reported, citing Second Deputy Premier and Energy Minister HE Abdullah bin Hamad al-Attiyah.


ExxonMobil said last month that it had called off plans to build a multi-billion-dollar facility with state-run Qatar Petroleum that would convert gas to diesel, citing high costs. Instead, the company will take part in a project to supply gas from Qatar’s North Field to the domestic market.


Qatar needed to give domestic production priority, al-Attiyah said at the 12th Annual Middle East Gas Summit in Doha this week, the gas-industry newsletter reported. Qatar could not afford to export gas it would need, the newsletter quoted al-Attiyah as saying.

Meanwhile, an energy consultant yesterday said that energy projects in the Gulf region faced delays and cancellations due to a massive shortage of engineers and labourers to build them.

“We’ve seen delays and cancellations here and around the world already and you’re going to see more of it,” Anne Keller of Jacobs Consultancy told an energy conference in Dubai.

Keller said that over the next five years the Gulf region needed an extra 700,000 workers just to build around $450bn worth of planned oil and gas processing plants, refineries and petrochemical complexes.


The workforce is short by 100,000 engineers and contractors, and another 600,000 labourers and construction workers, she said.

“That looks like a very difficult challenge,” she said. “Most of these projects will go ahead, but just not on their current schedules. They will be phased.”

The number of workers needed across the whole economies of the region was even larger. The downstream energy projects make up only a third of the $1.2tn of engineering and construction schemes planned across the region’s economies.

The global oil and gas industry is struggling to bring online new capacity to meet rapidly growing energy demand.
Tight energy service and labour markets and rising costs of raw materials have pushed costs up, and the Middle East has seen particularly fast inflation, she said.

“Middle East project costs have increased by 50-60% or more over the last two years,” she said. “This is more than in the rest of the world.”

A new refinery project in Kuwait was delayed after the country deemed bids for the scheme too high. Some of them were over twice Kuwait’s initial budget estimate. – Reuters, Bloomberg


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