* Latest move in Qatar energy sector to reduce costs
* Transition to be complete by end-2017 - QP CEO
* Some job cuts when merger completed; not in operations
(Adds detail, context)
By Tom Finn
DOHA, Dec 11 Qatar will merge state-owned
liquefied natural gas producers Qatargas and RasGas Co Ltd, the
chief executive of Qatar Petroleum (QP) said on
Sunday, in the Gulf state's latest reaction to lower energy
The more-than-two-year slump in oil prices has forced Gulf
countries to reduce state spending and consider consolidations
as a way to cut costs: among the biggest being Abu Dhabi's
merging of Mubadala and International Petroleum Development Co.
While Qatar is more focused on gas than oil, it too has been
forced into reorganisations, with QP already going through a
process that reduced staffing and earmarked a number of assets
The tie-up of Qatargas and RasGas, Qatar's number one and
two LNG producers respectively, has been talked about for a
number of years stretching back before the oil price reduction.
At a news conference, QP CEO Saad al-Kaabi said that behind
the announcement was an element of wanting to cut costs.
"Of course as an outcome of this cost reduction will be
realised, it will make us more competitive in the market," he
said, adding that the move would save "hundreds of millions of
dollars", without giving a timeframe for the savings.
"It's one business that will do the same thing. Putting it
all (in) one place gives you a much bigger advantage in
The transition, which will result in a single company called
Qatargas, will take around 12 months to complete and will begin
before the end of this year.
Once the new structure is in place, some areas of the
business could see job cuts, although the operational side of
the plants will not be affected, Kaabi said.
A Doha-based energy analyst said the move was in line with
QP's recent cost cutting but also had other benefits.
"Arguably the reasons for having two firms - to deal with
western and eastern markets and also to encourage some
competition during the rollout phase of LNG facilities - are no
longer relevant," he said.
Qatargas is the largest LNG-producing company in the world,
with an annual output capacity of 42 million tonnes a year,
according to its website. While QP owns a majority stake, global
energy firms including Total, Mitsui & Co and
ConocoPhillips also possess small stakeholdings.
RasGas has a production capacity of about 37 million tonnes
a year, according to its website. It is a 70/30 percent joint
venture between QP and Exxon Mobil.
(Writing by David French; Editing by Andrew Torchia and Dale