Identifier
Created
Classification
Origin
07DOHA202
2007-02-22 14:31:00
UNCLASSIFIED
Embassy Doha
Cable title:
RISING COSTS END EXXONMOBIL GTL PROJECT
how-toVZCZCXRO4748 PP RUEHDE RUEHDIR DE RUEHDO #0202 0531431 ZNR UUUUU ZZH P 221431Z FEB 07 FM AMEMBASSY DOHA TO RUEHC/SECSTATE WASHDC PRIORITY 6249 INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY RHMFIUU/DEPT OF ENERGY WASHINGTON DC PRIORITY RUCPDOC/USDOC WASHINGTON DC PRIORITY
UNCLAS DOHA 000202
SIPDIS
SIPDIS
E.O. 12958: N/A
TAGS: ECON EPET QA
SUBJECT: RISING COSTS END EXXONMOBIL GTL PROJECT
REF: A. DOHA 00174
UNCLAS DOHA 000202
SIPDIS
SIPDIS
E.O. 12958: N/A
TAGS: ECON EPET QA
SUBJECT: RISING COSTS END EXXONMOBIL GTL PROJECT
REF: A. DOHA 00174
1. (U) On February 21 Exxon Mobil and Qatar Petroleum (QP)
terminated plans to build a gas-to-liquids (GTL) plant
because of increasing costs to build the facility. The plant
was supposed to be become the world's largest GTL plant,
producing 154,000 barrels per day of base oils and synthetic
fuels. While there is no report of how high costs rose, the
plant was originally estimated at USD 7 billion.
2. (SBU) This announcement comes as a surprise to Post.
Emboffs met with Mark Tressler, ExxonMobil's GTL manager on
February 7 but no mention was made of this decision. He told
Emboffs that the company planned to use the products from the
GTL plant to make lube stocks to sell themselves
internationally. ExxonMobil would have also produced the 1.6
billion cubic feet of feedstock for the plant indicating that
the company would have controlled the entire process of the
natural gas development.
--------------
COMMENT
--------------
3. (SBU) This recent development confirms Sasol Chevron's
comments (ref A) that constraints in the construction sector
were increasing costs of GTL plants. ExxonMobil was slated to
pay 100% of the capital costs for the project which probably
contributed to the decision to end it. Minister al-Attiyah's
public statement that "GTL technology is expensive and very
technical" is an indication that it will be quite some time
until Qatar fulfills its aspiration to become the GTL capital
of the world. ExxonMobil's presence is unlikely to decrease
as the company has numerous other projects in Qatar,
including a project to develop a new gas field for domestic
Qatari use which was announced concurrently with the
termination of the GTL project.
UNTERMEYER
SIPDIS
SIPDIS
E.O. 12958: N/A
TAGS: ECON EPET QA
SUBJECT: RISING COSTS END EXXONMOBIL GTL PROJECT
REF: A. DOHA 00174
1. (U) On February 21 Exxon Mobil and Qatar Petroleum (QP)
terminated plans to build a gas-to-liquids (GTL) plant
because of increasing costs to build the facility. The plant
was supposed to be become the world's largest GTL plant,
producing 154,000 barrels per day of base oils and synthetic
fuels. While there is no report of how high costs rose, the
plant was originally estimated at USD 7 billion.
2. (SBU) This announcement comes as a surprise to Post.
Emboffs met with Mark Tressler, ExxonMobil's GTL manager on
February 7 but no mention was made of this decision. He told
Emboffs that the company planned to use the products from the
GTL plant to make lube stocks to sell themselves
internationally. ExxonMobil would have also produced the 1.6
billion cubic feet of feedstock for the plant indicating that
the company would have controlled the entire process of the
natural gas development.
--------------
COMMENT
--------------
3. (SBU) This recent development confirms Sasol Chevron's
comments (ref A) that constraints in the construction sector
were increasing costs of GTL plants. ExxonMobil was slated to
pay 100% of the capital costs for the project which probably
contributed to the decision to end it. Minister al-Attiyah's
public statement that "GTL technology is expensive and very
technical" is an indication that it will be quite some time
until Qatar fulfills its aspiration to become the GTL capital
of the world. ExxonMobil's presence is unlikely to decrease
as the company has numerous other projects in Qatar,
including a project to develop a new gas field for domestic
Qatari use which was announced concurrently with the
termination of the GTL project.
UNTERMEYER