IN SOLID STATE
THE PROSPECTS FOR QATAR’S ENERGY SECTOR LOOK BRIGHT AS THE DEMAND FOR NATURAL GAS IS EXPECTED TO DOUBLE BY 2040, NOT ONLY BECAUSE IT IS THE CLEANEST FOSSIL FUEL BUT BECAUSE OF ITS ABUNDANT AVAILABILITY.
With the third largest proven raw gas reserves after Russia and Iran, it is only natural that the entire world is looking to Qatar and other Gulf Cooperation Council (GCC) countries, along with Iran, (which are in possession of 67% of the world’s natural gas reserves and are responsible for 65% of gas trade and over 40% of the pipeline supply) to meet their energy requirements.
It is estimated that at 2013 extraction rates, Qatar’s proven gas reserves totaling 872 trillion cubic feet would last another 156 years. Hence, Qatar will continue extracting gas even into the second half of the 22nd century.
Gas production in Qatar grew at an average of 15.4% annually between 2009 and 2013 as additional LNG export facilities became operational, due to which Qatar is currently ranked among the top five countries globally for gas production.
In 2013, around 52.6% of gas production was allocated to LNG exports. Qatar also exported 11.7% of its gas production by pipeline to the UAE. The rest was consumed for domestic use including power generation and water desalination, feedstock for GTLs, petrochemical and fertilizer plants, and household cooking gas.
The QR37.49 billion ($10.3 billion) Barzan gas project is a North Field gas development project aimed at increasing production for domestic use. Initial production is expected in 2015 with incremental growth until 2023.
Qatar’s proven reserves of crude oil condensates and natural gas liquids (NGLs) were estimated at 25.1 billion barrels at the end of 2013, about 1.5% of proven world oil reserves. Rising production of condensates and NGLs have more than compensated for lower crude oil production in recent years.
Total crude oil, condensates and NGL production in 2013 was around 2 million barrels per day (BPD), of which 0.7 million BPD was crude oil and the remainder condensates and NGLs. Qatar accounted for 2% of world oil production in 2013. At current production rates, Qatar’s reserves of crude oil condensates and NGLs will last for another 34 years.
Qatar’s position as the leading exporter of LNG was underscored by HE Dr Mohammed bin Saleh Al Sada, Minister of Energy and Industry, during his address to the Brookings Doha Energy Forum held in April this year.
“Qatar’s prominent position in the global energy market is set to remain for years to come. The country is well placed to meet the increasing demand for gas. We are also committed to continue
“QATAR'S POSITION AS THE LARGEST LNG SUPPLIER IN THE WORLD COULD BE SURPASSED BY AUSTRALIA, PAPUA NEW GUINEA AND THE UNITED STATES IF THEY STEP UP THEIR GAS PRODUCTION. HOWEVER, THE ONGOING PROJECTS IN THESE COUNTRIES ARE NOT EXPECTED TO BE COMPLETED UNTIL THE 2020S AND THE DEMAND IS LIKELY TO OUTPACE SUPPLY. ”
meeting our obligations as a reliable energy producer, as a partner in development, and as an active player in ensuring market stability,” the Minister said.
As of now, Qatar remains the largest LNG supplier in the world, though it could be surpassed by Australia, Papua New Guinea and the United States if they step up their gas production. However, the ongoing projects in these countries are not expected to be completed until the 2020s and the demand is likely to outpace supply. Due to this, Qatar is likely to benefit from higher LNG prices for years to come.
According to the Brookings Doha Energy Forum report, Qatar has benefited from rising prices in Asia where demand has been strong owing to robust GDP growth and the switch to cleaner energy, notably in China. Qatar has, therefore, increased exports to Asia (71% of exports in 2013), mainly to Japan, South Korea and India.
While there is enough gas available at present to generate electricity, Qatar has been looking at an energy diversification programme for energy security and at other options as exploitation of gas is capital intensive. “Hence it is hardly surprising that some Gulf States are also turning to solar, nuclear and other renewable sources to help meet this ever-growing demand. Nevertheless, coal rather than oil is likely to become the dominant fuel source for the foreseeable future,” the report said.
The notable developments in Qatar’s oil and gas sector during the year include laying the foundations for the QR5.5-billion Laffan Refinery 2 (LR2) by The Emir, HH Sheikh Tamim bin Hamad Al Thani and the QR2.9 billion Jetty Boil-off Gas Recovery project.
While the LR2 project will double the condensate refining capacity of the existing LR1 to 300,000 barrels per day, reinforcing the country’s unique position as the largest condensate producer housing the biggest refining capacity in the world, the J-BOG project is the energy-saving environmental project aimed at recovering gas currently being flared during liquefied natural gas ship loading at Ras Laffan Port. The J-BOG project is the biggest environmental investment for LNG boil-off recovery in the world and a landmark project underlining Qatar’s commitment to protect the environment