WASHINGTON (AFP) – State-run Qatar Petroleum and US energy giant ExxonMobil Corp. announced they had shelved plans for a vast, multi-billion-dollar gas project in Qatar.

The companies announced the cancellation of the gas-to-liquids project in a brief statement issued by ExxonMobil without disclosing what had prompted the sudden mothballing of the major project.

It had been conceived as the world’s largest single, fully integrated gas-to-liquids project in the gas-rich Middle East state, worth seven billion dollars, when it was originally unveiled in July 2004.

Such projects enable energy firms to refine natural gas into fuel oils which can be sold or further blended with diesel fuel.

“The two entities (Qatar Petroleum and ExxonMobil) have collectively decided not to progress the gas-to-liquids project and instead to pursue the development of the Barzan Project in the North Field,” the statement issued by ExxonMobil in Texas said.

The Qatar gas project had been expected to kick start production by 2011 and it would likely have been lucrative for ExxonMobil as the company had been chosen to design, construct and oversee its operations.

Plans had called for the facility to be built in Qatar’s Ras Laffan Industrial City. Its expected output had been calculated at some 1.8 billion cubic feet (50 million cubic meters) of gas per day.

Qatar Petroleum has, however, offered the US firm participation in the Barzan gas project, as well as offering participation rights in all future phases of the project to ExxonMobil Middle East Marketing Ltd, ExxonMobil said.

“The Barzan Project is a very important strategic project for Qatar,” Qatar’s energy minister, Abdullah bin Hamad Al-Attiyah, was quoted as saying in ExxonMobil’s statement.

Barzan is also another large project intended to supply Qatar with domestic gas.

Qatar’s government also has gas production accords with other international energy groups including France’s Total, Anglo-Dutch Royal Dutch/Shell and South Africa’s Sasol.