Energy & Mining
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Qatar’s economy is dependent on hydrocarbons. While the trend over the past two decades has been for Gulf countries’ non-oil sectors to grow—they made up an average of 72% of the GDP in 2010, versus only 54% in 1990—the opposite has been happening in Qatar due to growing natural gas output since the late 1990s. Economic diversification relies on the government, which explains why the role of the private sector has been slow and, hence, delayed advancement in diversification. But with its Vision 2030 goals in mind, the government is set on strategically optimizing its oil and gas resources and making room for more value-added petrochemicals through the utilization of world-class technology and techniques. This will require a more prominent private sector role and a seismic shift away from oil and gas dependence.
Meanwhile, the development of human capital through research, training, and education are guiding the future of Qatar’s energy industry. The Qatar Science & Technology Park (QSTP) has been pivotal in providing a comfortable space for such advancements.
GOOD FOR GAS
Gas production stood at 157 bcm (5.5 tcf) in 2012, making Qatar the fourth-largest producer in the world. Some 80% of gas exports are comprised of LNG, 50% of which is destined for Asia. Qatar supplies gas to 23 countries around the world. The North Field, which is partly shared with Iran, is at the center of gas production. President and general manager of ExxonMobil in Qatar, Bart Cahir, told TBY how LNG growth has shaped the industry, “Our LNG trains in Qatar have tripled in size since the initial days, and the amount of gas that we can ship has also increased substantially with the introduction of the Q-Flex and Q-Max carriers. The Q-Max, for example, is approximately 80% larger than the conventional LNG ships of the past. These advancements, pioneered as part of Qatar’s LNG business, impact the industry as a whole with the introduction of additional LNG consumers into the market that were previously difficult to reach.” In 2005, Qatar imposed a five-year moratorium on itself to prevent the over-exploitation of its gas reserves whilst awaiting the results of a study analyzing the North Field’s reservoirs. The moratorium was also in place to ease tensions in the Gulf region, especially between Iran and Qatar’s neighbor Saudi Arabia. The study is also planned to reveal whether gas production in Qatar’s North Field is leeching gas from Iran’s portion, in what it calls the South Pars field. The lifting of the moratorium has been delayed time and time again, though it is expected to happen in 2015.
MORE WILL HERE
Over the past decade, a steep rise in the region’s population has burdened the electricity sector and new industries have emerged, including petrochemicals and aluminum smelting. This has made gas more expensive and critical to GCC member states, especially as economies less endowed with oil production relative to Saudi Arabia are holding onto their oil for export and thus seeking more gas to burn. The International Energy Agency (IEA) has predicted that the Middle East will make up 20% of the growth of the global demand for gas from 2011 to 2016.
The Dolphin Pipeline, which links Qatar to Oman and the UAE, stands as the only gas grid that connects Qatar to the region. Before Qatar became the gas entrepí´t that it is, it was in talks with GCC members Bahrain, Kuwait, Oman, Saudi Arabia, and the UAE to create a gas-sharing grid that would provide the region with dependable and sufficient gas supplies. However, the plan never took off.
At the time, there was no gas shortage and the lack of political will outweighed the advantages of further economic integration. Qatar went on to commit most of its gas to non-GCC countries. It then further stymied short-term development with the moratorium on development.
OIL IT UP
While oil may not be the main focus of energy efforts, it sustains clout as oil producers implement enhanced oil recovery (EOR) techniques to keep existing oilfields alive. At the end of 2012, Qatar had the 13th largest proven oil reserves in the world. The Oil & Gas Journal estimated that as of January 2013, the country had proven oil reserves of 25.4 billion barrels. OPEC estimated Qatar to be the 10th largest total liquids exporter among its 12 members in 2011. Qatar’s oil is exported mostly through the export terminal in Ras Laffan and destined for Asia, especially Japan and South Korea. The country hopes to raise total output capacity from the current 950,000 barrels of oil per day (bbl/d) to 1.2 million bbl/d. While oil reserves are expected to decline in the coming decade, liquids production is set to increase due to EOR and the growing role of condensate and natural gas liquids (NGL).
The country’s oldest and largest oilfield is the onshore Dukhan field. The field covers some 80 kilometers and has a capacity of 335,000 bbl/d, but its actual production is declining and now at approximately 270,000 bbl/d. The Al Shaheen field is located 180 kilometers offshore Doha and spreads across the North Gas Field. Maersk Oil Qatar operates the field. After expansion efforts in 2010, the field upped its output from 300,000 bbl/d to 525,000 bbl/d.
Just as demand for gas has been increasing, so too has that for oil. Demand for oil has risen threefold since 2000, even though petroleum consumption in 2011 was a mere 180,000 bbl/d. Qatar has a refining capacity of 338,700 bbl/d as of January 2013 and has two refineries—one in Umm Said and a 138,700-bbl/d facility in Ras Laffan. The Ras Laffan refinery began production in September 2009 and is among the largest of its kind in the world. Its shareholders include Qatar Petroleum, ExxonMobil, Total, Idemitsu, Cosmo, Mitsui, and Marubeni. Due to falling oil production, EOR techniques are being employed on oil fields across Qatar, such as the Al Shaheen, Dukhain, Bul Hanine, and Maydan Marjam. The Al Shaheen field, considered one of the most complex oil fields in the world, will be crucial in picking up Qatar’s oil slack, especially after its most recent update in 2009. Maersk Oil is currently utilizing the first offshore water alternating gas project in the Middle East on this field. The project has a capacity of 2.83-mcm per day. Meanwhile, Maersk has launched an oil research lab in Doha as part of a $100 million research investment to promote EOR and marine development.
DEVELOP FROM WITHIN
Research and education have been put on the forefront of Qatar’s efforts to advance its energy industry and promote diversification across all sectors. The QSTP was set up by the Qatar Foundation in 2009 to provide office and lab spaces for companies. The park allows companies from different sectors to work together freely and achieve cross-fertilization among international majors and local players.
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