(Adds McDermott, partners winning contract to build export project)
By Timothy Gardner
WASHINGTON, Feb 5 (Reuters) - Qatar Petroleum and Exxon Mobil Corp announced on Tuesday they will proceed with a $10 billion project to expand a liquefied natural gas (LNG) export plant in Texas, as companies race to meet global demand for the fuel.
Construction of the Golden Pass LNG project, in Sabine Pass, Texas, is expected to begin in early 2019. The project will add production capacity of around 16 million tonnes of LNG per year after it starts up in 2024.
Reuters had first reported details of the deal on Feb. 1, based on sources familiar with the matter.
"Golden Pass will provide an increased, reliable, long-term supply of liquefied natural gas to global gas markets, stimulate local growth and create thousands of jobs," Exxon Chief Executive Darren Woods said about the final investment decision.
Woods and Qatar Minister of State for Energy Affairs Saad al-Kaabi signed the deal at the Four Seasons hotel in Washington in the presence of U.S. Energy Secretary Rick Perry.
The deal is proof that two of the world's top energy producers can work together and "support rather than subvert an open energy marketplace," Perry said.
The Trump administration has promoted gas drilling and LNG exports in part to offer European customers alternatives to piped natural gas from Russia, while slashing Obama-era environmental regulations on energy operations.
"To understand how critical this is, imagine how Europe feels when the winter winds begin to blow and Russia has its hand on the pipe valve," Perry said. Russia has in recent years slashed gas shipments to Europe through Ukraine during pricing disputes.
Worldwide consumption of LNG is expected to more than double to 550 million tonnes a year (mtpa) by 2030, triggering a race among oil and gas companies eager to dominate the market.
The expansion is part of Qatar Petroleum's plans to invest about $20 billion in the United States as the company seeks to increase its overseas oil and gas business.
Qatar, a tiny but wealthy country, is one of the most influential players in the LNG market with annual production of 77 million tonnes. It plans to boost capacity 43 percent by 2023-2024.
Exxon has a 30 percent stake in Golden Pass and Qatar Petroleum holds 70 percent. The two have been strengthening a global alliance across LNG projects from the United States to Mozambique.
Energy industry construction firm McDermott International Inc and its partners Chiyoda International Corp and Zachry Group have won a contract worth more than $1 billion to build the export project, McDermott said separately on Tuesday.
The Golden Pass project is one of many that could be approved this year. Companies are expected to make final decisions on projects that could add more than 60 million tonnes per annum of LNG capacity this year.
Qatar left the Organization of the Petroleum Exporting Countries last year, allowing it to expand in the United States without concerns about proposed legislation that could limit OPEC members' investments in the country. (Reporting by Timothy Gardner; Editing by Steve Orlofsky and Susan Thomas)