DOHA (AFP) -- Qatar Petroleum and U.S. oil group ConocoPhillips signed Monday a memorandum of understanding for a 2.5-billion-dollar gas liquefying project, Energy Minister Abdullah bin Hamad al-Attiyah announced.

The agreement was signed by the minister, who is also Qatar Petroleum's chief, and Jim Mulva, president and chief executive officer of ConocoPhillips, on the sidelines of the World Petroleum Congress, Second Regional Meeting, which opened Monday in Doha.

The project calls for building a gas liquefying plant, to become operational in 2009 with a production capacity of 80,000 barrels per day. This could increase in the final phase of the project at an estimated total cost of five billion dollars, including 2.5 billion for the initial phase, developers said.

The plant is to be based in Ras Laffan, 30 kilometres (19 miles) north of Doha, where the Qatari authorities have initiated a series of projects to exploit their massive gas reserves, the third largest in the world after Russia and Iran.

Qatar Petroleum and South African minerals and hydrocarbons group Sasol initiated work Sunday on a one-billion-dollar gas-to-liquids (GTL) joint venture.

The project, also in Ras Laffan, involves the construction of a plant to be completed in the first quarter of 2005 to start exporting in the second quarter of 2006.

Royal Bank of Scotland will be the financial adviser for the 15-bank consortium underwriting 700 million dollars of the project's cost, with Sasol guaranteeing the rest.

Qatar's North Field is the world's biggest natural gas field, with proven reserves that were increased threefold in May to 25.5 trillion cubic metres (900 trillion cubic feet).