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.

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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

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