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30-06-2004 - Qatar Petroleum, its affiliate Qatar Terminal Limited, Zeebrugge
LNG Trading Company Limited, an affiliate of Exxon Mobil Corporation, and Fluxys LNG announced today
that they have signed a long-term, terminal capacity subscription agreement. The Boards of Fluxys LNG
and parent company Fluxys have decided in this context to invest €165 million in doubling the capacity
of the terminal. Two other capacity subscription agreements are to be signed in
the days to come.
The agreement will secure capacity for 3.4 million tons a year (MTA) of LNG (4.5 billion m³/per year
of natural gas) at the Fluxys LNG Zeebrugge terminal for a 20-year period, beginning in 2007. The LNG will
be sourced from Qatar's North Field, which holds estimated recoverable resources of more than 24,000
billion m³ of natural gas, and produced by Ras Laffan Natural Gas Co. (II), in which Qatar
Petroleum holds a 70 percent and ExxonMobil a 30 percent working interest. The agreement with
Fluxys LNG is a further step in the Qatar Petroleum and ExxonMobil joint ventures to be the
leading supplier of LNG to major markets in Europe, the United States and the Asia Pacific
region.
Considering the strategic location of the terminal Fluxys LNG launched in early 2003 an open
season market survey for LNG companies to express interest in booking capacity as from 2007.
The present capacity subscription agreement is the first one to be signed as a result of
that market survey. The Boards of Fluxys LNG and parent company Fluxys have decided in
this context to double the capacity of the Zeebrugge LNG terminal to approximately 7 million
tons of LNG a year (9 billion m3/per year of natural gas). Two other capacity subscription
agreements are to be signed in the days to come.
The present agreement follows the decision of Belgian federal regulator CREG to approve Fluxys
LNG's proposal of Main Conditions governing multi shipper access to the Zeebrugge terminal.
A specific legal and regulatory framework has also been worked out in order to ensure economic
viability for this enhancement project of European interest. The principles of multi-yearly
tariffs on the one hand and a profit margin reflecting the competitive environment on the
other have been endorsed by CREG. Fluxys LNG is still to submit to the regulator its formal
tariff proposal that will be coherent with established tariff guidelines and reflect active
competition between European LNG terminals and between LNG and pipe gas.
The capacity enhancement project requires the construction of a fourth storage tank and additional
send-out capacity at the Zeebrugge LNG terminal. Fluxys LNG is to invest €165 million in the project
and expects it to positively impact its results as from 2008.
Safety and environmental reports for the enhancement project have been approved by the
authorities involved and all permit requests have been filed in due time. Fluxys LNG expects
all permits to be obtained by the end of September 2004 at the latest and preparatory works on
the terminal site could start as early as August 2004. The new send-out and storage capacities
should be operational by the end of 2006 and 2007 respectively.
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