(Recasts, adds Shell pulling out of Qatar Block-D, background)
DOHA/MILAN/LONDON, July 18 (Reuters) - Royal Dutch Shell has abandoned plans to explore for gas in Qatar's BlockD after recent drilling failed to turn up commercial volumes atits majority-owned QSD-1 well, two sources with knowledge of thematter said.
Shell said earlier on Friday that it had wrapped up activityat the well after the negative result, while adding that itremained committed to future plans in Qatar.
The gas-rich Gulf country has been a major source ofproduction growth at Shell for over three years, since the majorinvested $20 billion to build one of the world's biggestliquefied natural gas (LNG) export plants as well as a cuttingedge gas-to-liquids facility, Pearl.
Shell's exit from the 8,089 square-kilometre license areamay also disappoint Qatar Petroleum, which was to be theoff-taker of any gas produced.
Part of the Block D concession extends beneath Qatar'sprized North Field, the world's biggest gas field that feedsgiant liquefaction trains. Qatar is the world's top LNGexporter.
"Shell only pulled out of that section of the North Field(that overlaps with Block D), and they will continue to work onother (Qatari) projects," one of the two Qatar Petroleum sourcessaid, while the other said Shell had been out of the D licensefor months.
A third source said Shell planned on additional developmentdrilling in the North Field to replace slowing output fromexisting wells.
Earlier, Shell said its Block-D exploratory well "reachedtotal depth as planned; however, it did not encounter commercialvolumes of hydrocarbons".
The QSD-1 project is 75 percent owned by Shell and 25percent by PetroChina. (Reporting by Amena Bakr in Doha, Oleg Vukmanovic in Milan andRon Bousso in London, editing by William Hardy and Jane Baird)
