Qatar State Oil To Join Venezuela's LNG Project Off Paria

Qatar's state oil firm will join the Anglo Dutch Royal Dutch Shell Group and Japan's Mitsubishi Corp to help develop Venezuela's LNG project off Paria, the President Hugo Chavez said.

"The Venezuelan state holds the largest share in the Mariscal Sucre gas project, and we have also invited other countries to participate in this project. The state of Qatar will go along with us," Chavez said during the his weekly television and radio program, "Hello, President."

The Ministry of Energy and Mines announced last week that Shell would hold a 30 percent stake in the more than $2-billion offshore Paria development, while the Japanese trading house will take 8 percent.

Deputy Energy Minister Bernardo Alvarez on Friday said that the 60 percent share held by Venezuelan state oil firm Petroleos de Venezuela (PDVSA) could be reduced to give a small participation to the state firm of Opec ally Qatar.

Qatar General Petroleum Corp (QGPC) currently operates a large LNG project in Qatar, while Mariscal Sucre would be Venezuela's first foray into the gas export market.

The remaining 2 percent of Mariscal Sucre has been earmarked for Venezuelan investors.

The world's No. 5 crude exporter, Venezuela also holds the world's eighth- largest reserves of gas and is looking for LNG developments to diversify its oil- reliant economy.

Mariscal Sucre would export 4.7 million tonnes per year of LNG beginning in 2007, with the United States, Europe and Brazil eyed as potential markets.

Venezuelan officials hope the deal will be signed during the first half of June, while analysts warn a quick start-up is essential for the project to be viable.

Output from established ventures in Trinidad & Tobago and Nigeria is rising, leaving Venezuela with a window of less than five years to begin LNG exports if it wants to compete in the giant U.S. market, industry analysts say.

The offshore gas would also be used to feed growing domestic demand.

Last week, ministry officials announced the world's largest oil firm ExxonMobil will not participate in the Sucre project despite negotiations that stretch back to the early 1990s.

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