STRONG ASSETS

Qatar 2014 | ENERGY | VIP INTERVIEW

TBY talks to HE Dr. Mohammed Bin Saleh Al-Sada, Minister of Energy and Industry, on the Qatar National Vision 2030, the role of renewables, and being a hub for gas.

What have been some of the ministry's major achievements in recent years?

Qatar's Ministry of Energy and Industry's work is focused on 2 main areas: utilizing Qatar's energy resources, and diversifying sources of income by widening the country's industrial base. These elements lie at the heart of the State of Qatar's industrial strategy.

To meet this, the Ministry of Energy and Industry is implementing robust plans to develop and capitalize on our hydrocarbon wealth, and to raise the export value of our growing industrial sector.

“Qatar has put immense efforts and investments in developing its gas exporting capacity."

Qatar's industrial sector celebrated a major milestone in 2011 with the inauguration of Pearl GTL, the world's largest gas-to-liquids (GTL) plant, at Ras Laffan Industrial City. A joint venture of Qatar Petroleum and Shell, Pearl GTL represents the world's first realization of GTL technology applied on a world-scale basis and has the capacity to produce 140,000 barrels per day (bbl/d) of GTL products.

Besides Pearl GTL we are building the strategic multi-faceted Barzan gas project. Expected to be fully operational by 2014, this project will help meet the country's future needs for clean burning natural gas in the power and water sectors, and provide feedstock to the Country's petrochemical and refining industries.

Another important development is the construction of the second Laffan condensate refinery, which will double Ras Laffan's total installed condensate refining capacity to about 300,000 bbl/d when it comes online in 2016. This will make it one of the largest single site facilities for condensate refining in the world. The new refinery will meet the long-term needs of the local and export markets, and pave the way for further optimizing our condensate processing, creating new opportunities, and enhancing our refining and export capacities.

Qatar's economic and industrial diversification is further boosted by the inauguration of another addition to the petrochemical industry with the completion of the QAFCO-5 project, which is the world's largest single-site producer of ammonia and urea.

Continued progress in achieving diversity in the industrial sector also saw the opening of one of the largest-ever aluminum smelters to be built in one phase. Qatalum celebrated another ambitious energy project in Qatar, with a state-of-the-art facility that includes a carbon plant and a casthouse, producing value-added aluminum products such as extrusion ingots, foundry alloys and standard ingots that meet the most stringent quality standards of the global market.

One of the main pillars of the Qatar National Vision 2030 is environmental development. What steps is the ministry taking in order to achieve this?

The State of Qatar through its industrial strategy aims to “contribute to the protection of global environment pursuant to Kyoto Protocol of 1997, and to the international economic stability by securing sizeable portion of long-term supplies of cleaner energy from liquefied natural gas."

Qatar has recently joined the World Bank's Global Gas Flaring Reduction Program. We have had a major flaring reduction initiative at our Al-Shaheen oil field registered under the UN's Clean Development Mechanism. This project will generate some 2.5 million credits of Certified Emission Reductions per year.

Furthermore, the Al-Karkara Oil Field -the latest oil field to be developed in Qatar- is the first oil field in the country to be zero gas flaring.

It is worth mentioning that Qatar Petroleum is active in the State Climate Change Policy Formulation and Coordination Committee. This committee was established in 2007 by His Highness the Heir Apparent Sheikh Tamim bin Hamad. QP's representation on this committee helps it to provide direct input into domestic policy discussions, and the ability to influence the formulation of negotiating positions in international forums.

We have adopted a number of initiatives to achieve the environmental goals of QNV2030, including the establishment of a Corporate HSE & Sustainable Development Directorate reporting directly to QP's Managing Director. This was an important move to stress the importance of the protection of the environment and the safety of QP's human and material assets. In addition, we have implemented HSE Management Systems (ISO-14001 & 18001) in all QP Business units.

Qatar Petroleum has established a research and development program at Qatar Science & Technology Park focused on many facets of its businesses, with environmental protection and sustainable development taking the lion's share of the proposed program.

The Ministry of Energy and Industry has demonstrated strong commitment to protecting the environment, be it in the environmental prerequisites of obtaining industrial licenses, or in the monitoring of industrial projects and their adherence to the requirements of environmental protection.

How would you characterize the non-oil potential of Qatar's industries?

We believe that small and medium scale industries are essential tools to diversify and redistribute the country's sources of wealth, and to lessen dependence on hydrocarbon resources.

In this context, the state of Qatar offers several incentives and facilities to industrial projects including soft loans at highly competitive rates, terms, and repayment periods through Qatar Development Bank (QDB) and bank associates; as well as the use of our ultra-modern and fully serviced industrial estates.

In 2011, the output of the various Non-Oil-Non-Gas (NONG) sectors grew at a steady pace, contributing almost 26% of total GDP growth at current prices.

In terms of their relative importance, the finance, insurance, real estate, and business services sectors have kept the lead among other NONG sectors, with a share reaching 27.5% in 2011, and a rapid growth rate surging to 18.2% compared to 6.9% in 2010.

What developments need to be made in order to increase transparency in Qatar's business environment?

We believe that transparency and accountability are the cornerstones of public and corporate governance and a pre-requisite for building a world-class economy.

Efforts are underway in building institutions and organizational capacities that are based on efficient and transparent delivery of public services, fruitful public-private cooperation and partnerships, providing a vibrant climate for business and a larger space for civil society.

The presence of central agencies like the High Committee for Transparency is a guarantor for greater transparency, accountability and governance.

As we encourage best practices in both the public and private sectors, we believe Qatar's business environment in general stands to benefit with more transparency touching areas like budgets, expenditure, procurement, delivery of services, and HR management.

One of the main challenges in many oil rich countries is the transition from a resource-based to a knowledge-based economy. What efforts is the ministry making in order to promote this and to what extent does Qatar Petroleum strive to achieve this?

In resource-based economies, abundant natural resources help governments maintain high living standards, strive towards people's development, and ensure the nation's prosperity.

In Qatar, we are harnessing our hydrocarbon resources and utilizing this economic wealth to help create a conducive environment for a sustainable knowledge-based economy. We have adopted a national development strategy focused on economic diversification that should position the non-hydrocarbon sector as the co-driver of future GDP growth, thus paving the way for the development of a knowledge-based economy.

Education and research play a decisive role in our efforts. This is why Qatar has invested time and resources in trying to create a world-class education system. The oil and gas industry in Qatar has supported this by promoting the National Research & Development programs of the Universities in Qatar and linking them to the need of the industry.

Qatar has also instituted Education City and the Qatar Science and Technology Park, which offer a host of incentives for international investors in high priority areas like R&D, knowledge transfer, and technology advancement.

Qatar Petroleum has spearheaded the development and growth of Qatar's economy for decades through a highly successful investment program in hydrocarbons. We will continue to play a central role in this effort, as well as in the effort to create a strong, diversified, and sustainable national economy. Our main purpose is very clear: to convert Qatar's hydrocarbon resources into a stream of healthy cash-flow, which could support Qatar's further development and transcend the nation into a sustainable and knowledge based economy.

How would you evaluate Qatar's potential to become a regional energy hub and a provider of energy security to Europe? How will the ORYX and Pear GTL plants contribute to this?

Qatar has positioned itself as a pivotal player in the energy trade, with its current position as the largest LNG producer, and home to the third largest reserves of natural gas in the world. We have the advantage of an ultra-modern fleet of LNG vessels, and the proximity to the world's main energy markets.

The world is witnessing a considerably increasing demand for natural gas as an alternative source of clean energy; forecasted to double within the next thirty years. Natural gas is a clean, safe and cheaper energy alternative compared to crude oil, which is why many countries - including oil producers- lean towards shifting to this option.

Europe is placing increasing importance on natural gas, and specifically LNG, as part of its energy mix and security. The last nuclear disaster in Japan forced many European nuclear power enthusiasts to re-assess their strategies, especially in the light of growing public opposition. Qatar has already demonstrated to be a reliable energy producer and exporter by meeting the long-term needs of several Asian energy-hungry economies.

We think Europe needs to partner with Qatar and take an urgent call to plan and secure a long-term LNG supply capable of fulfilling its future energy needs.

On the supply side Qatar has put immense efforts and investments in developing its gas exporting capacity as well as building world-class downstream projects. Pearl and Oryx plants are just two of those investments, which have succeeded in making Qatar the “Gas to Liquids Capital of the World". With a combined production averaging more than 170,000 bbl/d of high-quality GTL products, we are meeting international requirements for superior performing lubricants, and eco-friendly transportation fuels.

What is your general outlook for the Qatari energy sector in 2013 and beyond?

The general outlook for the Qatari energy sector in 2013 and beyond is that of a driving force behind the phenomenon economic development. We have already embarked on this road leading to transformation. We are there to provide the energy back up and infrastructural needs for the mega industrial and urban projects including the developmental needs of the construction of new airport and sea port, besides the prestigious FIFA 2022 World Cup infrastructure projects.

As mentioned earlier, the energy sector has tailored its strategic plans to meet the state's commitments. The Barzan gas project is a powerful step forward in Qatar's overall industrial and human development. It is project that is solely dedicated for local gas consumption needs, playing a significant role in meeting rising domestic gas demand. The project is in EPC phase and is expected to start production in 2014 with a daily output of 1.4 billion BBTU.

The second phase of Ras Laffan refinery will add 146,000 bbl/d to the current refined products capacity in Qatar. Petrochemical industries will also witness a boost in the upcoming decade; several projects with a budget exceeding $20 billion are at different stages.

Through Qatar Petroleum International, QP's International arm, the Qatari energy sector is expanding its outlook beyond the national boundaries to participate in international opportunities in several downstream and upstream projects, the latest being a refinery project in Egypt and a petrochemical complex in Vietnam.

© The Business Year - June 2013