Exxon Mobile and Qatar Petroleum have announced huge investments of $10 billion in American Natural gas sector. The deal is part of ongoing move between the countries to strengthen diplomatic and trade relations after Saudi Arabia along with its allies started a trade embargo against the country.
The $10 billion investment by the companies wants to turn gas import terminal in Texas, Golden Pass to an export hub for shale gas extracted from fields in New Mexico, Texas and others. Qatar Petroleum being the largest LPG exporter in the world, would gain cheaper and quicker asses to Latin America through the export hub which will give it a free hand to redirect domestic production to Asian Markets.
move by the State-owned Qatar Petroleum is seen as a move to appease Trump
administration who has established cordial relations with Saudi Arabia. The
Trump administration has attempted to mediate between the Saudi Arabia-Qatar
dispute but has sent conflicting signals about his view of the issue.
Qatar has used its money from the gas resources of the country to exert political influence in North Africa and Middle East by investing in causes like supporting Hamas in Gaza financially, alliance with Muslim brotherhoods and television broadcasting. The country is also host to a major US military base.
Qatar Petroleum has invested in Golden Pass for years. Building the giant terminal cost around $2 billion which was designed to import gas. But the domestic glut that followed after the shale gas drilling frenzy led to the eight years long dormancy of the facility. The companies have agreed to add gigantic refrigerant plants to the Golden Pass facility by reversing some pipelines. The plants will cool the gas to -260 degree Fahrenheit and will condense it to a liquid for loading in tankers ready to be shipped to Asia, Europe and Latin America.
The Golden Pas will create nearly 9000 jobs during the five-year long construction period along with 200 permanent positions. Exxon Mobile will remain as a junior partner of the project as 70% of the project will be funded by Qatar Petroleum. The companies have a history of long-term projects in Mozambique, Brazil and Argentina. This will expand Qatar’s footprint worldwide as it is currently working with international corporations to increase the LNG production by 40% and more. An Energy expert said that the deal is both economically and politically aligned.