Most of Qatar’s present energy industry investment programme will be completed this year. The next challenge is defining a long-term strategy for Qatar’s entire economy
Qatar’s deputy premier and Energy & Industry Minister Abdullah al-Attiyah said oil and gas production would rise from the equivalent of 2.5 million barrels a day (b/d) now to 5 million b/d in the future. He was speaking at MEED’s Qatar Projects 2010 conference on 26 January.
This will put Qatar among the world’s top 10 oil and gas-producing nations. But it is already a heavyweight in global energy. When QatarGas 4 starts operating later in 2010, its total annual LNG capacity will rise to 77 million tonnes. This will underline Qatar’s position as the world’s largest LNG exporter and raise its share of the LNG market to more than 30 per cent.
The most significant start-up will be at the Pearl gas-to-liquids (GTL) plant, also in Ras Laffan. It will have capacity of 260,000 b/d and will be the world’s largest GTL plant by far. Shell’s $19bn investment in the project is the largest element of its massive commitment to Qatar. It is a 30 per cent shareholder in QatarGas and has joint ventures with Qatar in China and Singapore.
Other megaprojects to be completed in 2010 include Qatalum, the largest aluminium smelter ever launched, the 1.4 million tonne-a-year Ras Laffan olefin cracker and the QChem II petrochemical complex in Mesaieed.
At the end of 2010, Qatar will have completed, one of the greatest energy investment programmes the world has ever seen since the start of 2009. This involves more than 12 projects costing at least $50bn.
Delegates at MEED’s conference were most interested in hearing what happens next. Al-Attiyah and other speakers provided clues. The North Field moratorium is designed to allow time for detailed studies of the true capacity of the world’s largest non-associated oil field reservoir and will continue until 2014. Meanwhile, Qatar will focus on debottlenecking existing oil and gas facilities. The single new energy megaproject that has been recently announced is a $6bn joint venture petrochemicals complex in Ras Laffan with Exxon, partner with Qatar Petroleum (QP) in RasGas.
Qatar is now focusing on creating the domestic infrastructure necessary to support an economy that is projected to double to about $150bn in not much more than five years. According to present trends, Qatar’s dollar GDP in 2015 will be no less than 18 times larger than it was in 1995. This is the most explosive and sustained rate of growth recorded by any economy in history.
The first challenge is dealing with an extraordinary increase in population. Official figures show almost 1.6 million now live in Qatar. This is more than three times the figure 15 years ago. Almost half are construction workers who will return to their home countries in due course. The Qatar national masterplan is being prepared on the assumption that Qatar’s population in 2032 will rise to 2.4-2.6 million. Only a fraction will by then be construction workers.
Qatar, therefore, has to deal with a massive short-term population increase that is largely due to the need to import foreign labour on a temporary basis while simultaneously catering for the steady, long-term growth in the number of people who will mainly work in non-oil services.
The second long-term challenge is creating employment for Qatari nationals in non-oil sectors. The Qatar government is now looking at ways to stimulate light industry, IT and finance.
The third challenge is deciding how to manage economic development outside Doha. More than 80 per cent of Qatar’s total population lives in the capital. The number living in Dukhan, Qatar’s oil city; Ras Laffan, which mainly supports the gas industry and Mesaieed, Qatar’s principal industrial city, is expected to grow robustly. The government also plans to address the needs smaller and older settlements such as Wakra and Al-Khor.
The need for a coherent national economic strategy is moving up the agenda. It will be addressed in the Qatar national development framework which should be published later in 2010. Much will depend on what it contains, although it is not expected to answer every question. But the good news is Qatar is not only thinking big, it is thinking long-term too.
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