Qatar and Exxon Mobil to Invest $10 Billion in Texas Gas

Qatar and Exxon Mobil Plans to Invest $10 Billion in Texas Gas

Qatar Petroleum and Exxon Mobil announced recently that they are investing heavily in US natural gas exports. The agreement aims in part to strengthen Qatar’s ties with the United States nearly two years after Saudi Arabia and its allies launched a trade embargo on the country. The companies said they would spend more than $ 10 billion to transform Golden Terminal, a Texas terminal originally built to import gas, into a hub for gas exports from shale deposits in Texas, New Mexico and elsewhere.

A further push in the United States would give Qatar Petroleum, already state-owned, already the largest liquefied natural gas exporter in the world, faster and cheaper access to Latin America, freeing up more of part of its domestic production for lucrative Asian markets.

Qatar and Saudi Dispute

Qatar is also trying to strengthen relations with the Trump administration, which has established close ties with Saudi Arabia. For Qatar, it serves as a counterweight to Saudi Arabia and its relationship. Saudi Arabia and Qatar are currently looking to invest in the US liquefied natural gas field, and both think it will be favored by the Trump administration. The administration has periodically attempted to settle the dispute between Qatar, Saudi Arabia, Bahrain, the United Arab Emirates, and Egypt since the group led by Saudi Arabia has cut off economic and diplomatic ties with Qatar in 2017.

But President Trump sent contradictory signals as to his intentions, seeming to support Saudi Arabia and its allies in the dispute. For a long time, the country has used its resources to exert political influence across the Middle East and North Africa, with television broadcasts, financial support for Hamas in Gaza and alliances with Muslim Brotherhood chapters and militias in the region. The country is also home to a major US military base.

Investing In Texas Shale

Qatar Petroleum has been a large-scale investor in Golden Pass for a number of years, now. Originally, the giant Sabine Pass terminal in Texas was designed to import gas and its construction cost $ 2 billion about 10 years ago. But the frenzy of natural gas drilling in the shale fields has created a domestic glut, and the facility has been dormant for eight years. Exxon Mobil and Qatar Petroleum will reverse some pipelines and add huge refrigerant facilities to Golden Pass.

The plants will cool the gas to minus 260 degrees Fahrenheit and condense it into a liquid that will be loaded onto tankers and shipped to Latin America, Asia, and Europe. Golden Pass is expected to create around 9,000 jobs over five years of construction and 200 permanent jobs. In 2017, the Energy Department approved Golden Pass exports. Golden Pass will provide a long-term supply of liquefied natural gas to global gas markets.

Qatar Petroleum will own 70% of the project, with Exxon Mobil as a junior partner. Both companies have a long relationship that includes projects in Argentina, Brazil, and Mozambique. Qatar Petroleum’s footprint is growing at home and around the world. In Qatar, it collaborates with international companies to develop L.N.G. production capacity of more than 40%. It is also developing in Morocco, Cyprus, Mexico, Brazil, Argentina, South Africa, and Mozambique, and has expressed interest in billions of dollars of additional investment in oil and gas production in the United States. Much of the money comes from investments that Qatar has withdrawn from Middle East countries in retaliation for the blockade. In December, the country announced it would leave the Organization of the Petroleum Exporting Countries, OPEC, a predominantly Saudi Arabian, to focus on its gas business. Qatar is stepping up investments around the world in response to developments in the global gas market. Qatar’s dominance in natural gas transport over long distances has been challenged by Australia and, more recently, by the United States, as well.