World’s leading gas exporter wants to become champion of renewable energy

Since ancient times, the sea has been the main economic lifeline for the people of what is today Qatar, with the waters of the Arabian Gulf providing fish for sustenance and pearls for trading from China to the coast of East Africa.  

These days the sea continues to play the major role in the fortunes of the tiny emirate, as deep beneath the blue waters off the northeastern coast of Qatar lies one of the largest deposits in the world of natural gas, the North Field; making the country the biggest exporter of this increasingly important energy source.

Extracted and processed to become liquefied natural gas, or LNG, the mixture of mainly methane and a bit of ethane is seen as cleaner, safer and more easily transported than other hydrocarbons, important in a world which is seeking out more environmentally-friendly fuels.

Producing around 77 million metric tons of LNG each year, Qatar accounts for around a third of annual global exports and sector analysts note that thanks to wise investment in natural gas infrastructure over the past several decades, the country can produce, process and ship the gas cheaper than any of its neighbors.

Qatar is also one of the few countries that can handle the full LNG production chain: upstream, downstream and transport, for which the country has the largest LNG tanker fleet in the world.

Located halfway between Europe and Asia, Qatar is also perfectly positioned to supply its gas customers quickly and at a lower price than most of its competitors.

But as LNG’s popularity as a clean and efficient fuel increases, rival producers are taking aim at Qatar’s dominance of the world market which is expected to rise to 330 million metric tons by 2018.

With an eye to its near, and energy-hungry, neighbors like China, Japan and South Korea, Australia is planning on going head-to-head with Qatar in the LNG market, while the United States is also setting its sights on boosting exports of LNG from shale.

By 2030, Qatari officials want to increase solar capacity to a staggering 10 GW

Other producers expected to help meet future demand are Egypt, Israel, Tanzania, Mozambique and Cyprus.

Despite the current low prices for petroleum products and the volatility of the market, Qatari officials say now is the time to invest in new projects to ensure the country can maintain its output,  be ready to roll when prices bounce back and use the earnings for its ambitious economic development plans.

“We expect that we will go through one more downturn cycle of oil prices, but we will recover,” predicts Qatari Minister of Energy & Industry Dr Mohammed bin Saleh Al-Sada, and analysts concur.

“Qatar can live well with low oil prices,” says Abdullah bin Hamad Al-Attiyah, former energy minister and current chairman of the Abdullah bin Hamad Al-Attiyah International Foundation for Energy & Sustainable Development.

“This is a circle, it is not something new. My expectation today is that it will take years for oil to go back to normal again. Back in the 1990s we had this oil problem and managed it by cutting the fat and restructuring the budget.

“We always ask ourselves this question: What happens after oil and gas? We do not want to go back to where we were before and that is why we have economic diversification, a sovereign wealth fund, investment in education and high tech and alternative revenues.”

“Qatar is a small country and small countries always move faster than the big ones.”

One of the new endeavors is the Barzan Gas Project, a $10 billion joint venture between Qatar Gas and ExxonMobil, which will eventually produce 1.4 billion standard cubic feet a day of gas for the domestic market.

In addition to gas, Barzan will produce about 22,000 barrels per day (bpd) of field condensate, 6,000 bpd of plant condensate, 34,000 bpd of ethane, 10,500 bpd of propane and 7,500 bpd of butane.

Construction of the project, incorporating offshore and onshore facilities, started in 2011. The offshore facilities include three offshore wellhead platforms, subsea pipelines and cables.

The onshore facilities are comprised of a gas processing unit, a sulphur recovery unit to remove impurities from the natural gas, and a natural gas liquids (NGL) recovery unit. Ethane produced from the plant will be used as a feedstock for Qatar’s growing petrochemical industry.

Expected to be fully operational by next year, the facility will be managed by RasGas and make a major contribution to Qatar’s economic development, executives at participating companies say.

“Barzan is a significant project that will help take the country through its phase of growth to support the 2022 World Cup and Vision 2030,” says ExxonMobil Qatar President and General Manager Alistair G. Routledge.

“The challenge is to foster a sustainable economy with capabilities beyond oil and gas to meet energy demand and that includes renewable energy.

“And while Barzan is clearly the strategic project to support growth in the near future, looking ahead the challenge for the country’s leaders will be to determine how best to incorporate other energy sources to maintain this growth over the long term.”

But economic growth requires much more than just financial support, with human capital vital to any development, and ExxonMobil is also playing its part, the executive says.

“We put a lot of focus on developing the national workforce through the people we hire and the students we support both directly and indirectly,” he explains.

“And we also provide training opportunities, not only for our own employees but for employees of joint venture partners RasGas, Qatargas and Qatar Petroleum as part of a program called ‘Tamayoz’, which means ‘excellence’ in Arabic.”

In the city of Mesaieed, 30 miles south of Doha, Qatar Fuel (also known as Woqod), is building a new plant to manufacture bitumen, a hydrocarbon product used for road surfacing and roofing, which is now much in demand for the country’s extensive infrastructure projects.

Left: Essa bin Hilal Al-Kuwari, President, Kahramaa. Center: Sheikh Saoud bin Abdulrahman Al-Thani, Chairman, WOQOD. Right: Alistair G. Routledge, President and General Manager, ExxonMobil Qatar

“As you can see, in Qatar most of the growth is coming from the infrastructure sector, because all of this infrastructure has to be completed before the World Cup in 2022,” says Woqod Chairman Sheikh Saoud bin Abdulrahman Al-Thani.

“The Public Works Authority has a huge demand for bitumen and though Woqod is not the sole supplier of bitumen, we want the company to be a leader of this in Qatar, and provide a high-quality product.”

Along with bitumen manufacturing, the company is involved in almost every aspect of downstream petroleum products including diesel and gasoline for vehicles, boats, aircraft and industry, and also trades in bunker fuels, ship-to-ship bunkering and LPG.  

Being heavily reliant on the country’s hydrocarbon sector gives the executive an unparalleled insight into the state of the nation’s economy, both present and  future.

“The steps that the government has taken in terms of maintaining the sustainable growth rate have been successful with diversification of the economy accelerating in recent years where the contribution of the non-oil sector to the gross domestic product approached 60%, which makes Qatar less dependent on the oil sector,” he says.

“On the other hand, the drop in oil prices taking place in the last two years has had a minor impact on Qatar and on the region to a certain extent. However, the conservative and precautionary steps, and the strategies adopted by the government has resulted in utilizing our available resources more efficiently and productively which ensures our sustainable growth during the coming years.”

Qatari companies in the power generation and other sectors are also operating abroad such as Nebras Power which was established two years ago as a joint partnership among Qatar Electricity & Water Company (QEWC), Qatar Petroleum International and Qatar Holding.

“Before then these three companies were investing in the power generation sector in the international market and we asked ourselves: ´Why should we have three different entities competing against one another for the same business?’ So we created Nebras,” explains CEO Khalid Jolo.

Currently, Nebras provides services and solutions for LNG handling facilities, water treatment plants, fuel sourcing and supply ventures, making it a significant player in the Middle East, Europe and Southeast Asia.

“We have the right mix as each of the three partners are experts in their fields–QEWC in developing, operating and maintaining power projects; Qatar Petroleum International with their experience in LNG, gas-receiving, processing and transportation; and Qatar Holding in finance and finance structuring,” he says.

Championing sustainable development

Qatar may be synonymous with oil and gas but the emirate is also championing the development of a thriving renewable energy sector as part of its drive to build sustainable development and meet future energy demands.

It has, of course, abundant solar energy potential, and the government plans to have 1,800 MW solar power capacity by 2020, which should make up around 16% of total power generation. By 2030, Qatari officials want to increase solar capacity to a staggering 10 GW.

Two of the country’s largest energy companies, QEWC and Qatar Petroleum, signed a joint venture agreement in June that will see an investment of $500 million in renewable energy projects.

With this large focus on solar, the joint venture will go a long way in helping the nation reach its renewable energy goals.

Qatar General Electricity and Water Corporation (Kahramaa) is also investing heavily in renewable energy. With electricity generation capacity of more than 5,400 MW, it is the second largest utility in North Africa and the Middle East, and was the first private company in the region engaged in the generation of electricity and water desalination when it was established in 2000.

Kahramaa plans to generate 200 MW from solar energy facilities by 2022 and is currently building the country’s first solar plant in Duhail which will generate 10 to 15 MW when it goes operational later this year.

The company is also training local engineers and technicians in renewable energy technology which is in line with the government’s “Qatarization” program, one of the pillars of Vision 2030 that aims to boost the portion of Qatari citizens employed in the industry and energy sectors to 50%.

Renewable energy generation is a main feature at one of the company’s most impressive projects, the Kahramaa Awareness Park (KAP).

Located near Doha and Hamad International Airport, KAP gives Qataris a real taste of what the future of energy generation and water distribution in their country could be like, and stands to become one of the country’s sustainability landmarks.

It has been designed to function as a science museum for disseminating information and raising awareness on ways to conserve water and electricity, which is particularly pertinent as Qatar is one of the world’s largest per-capita consumers of electricity and water.

This is partly due to the fact that electricity and water are free of charge for the local population which means there is no financial incentive to use these resources conservatively.

Educating the young population about conserving their use of energy and water forms part of Kahramaa’s multifaceted sustainability strategy, and is integral to the goal of building the sustainable economy envisioned by the government and Vision 2030.

Through this innovative educational project, Kahramaa is helping the nation to reach that goal.

Three renewable energy systems have been installed at the park to power the museum complex: three wind turbines generating 30 KW; 42 square meters of solar panels for water heating; and another photovoltaic installation that can provide up to 63.3 KWph. Together they will offset 37 tons of carbon dioxide.

Aside from the science museum of water and energy conservation, the park, which has been built using a variety of recyclable materials, has a theater and ‘eco’ café.

In recognition of the sustainability awareness efforts initiated by Kahramaa, KAP won the Every Globe Award in 2015.

The resources awareness campaign comes at an opportune time as Qatar’s demand for energy and water is set to skyrocket over the coming years. Electricity demand is forecasted to grow 6 to 8% annually, while water demand will increase 50% by 2022. In a bid to cope with this rising demand, Kahramaa is investing in a series of mega projects to increase its power and water capacity.

One of the main projects is Rawdat Rashid, a $600 million scheme for five reservoirs with a capacity of 100 million gallons of water each, making them the largest reinforced concrete reservoirs in the world.

In guaranteeing there will be enough electrical power over the coming decades, Kahramaa is building a major transmission and distribution center in Duhail at a cost of $70 million, and a new $3 billion independent water and power project that will have an installed electric generation capacity of 2400 MW and 130 MIGD (million Imperial gallons per day).

“Kahramaa has managed to complete vital electricity and water projects, while investing in infrastructure to cope with the comprehensive development and the increasing demand. It comes within our national responsibility as a lea​ding corporation,” says President Essa Bin Hilal Al-Kuwari.

By making these vital investments and promoting the idea that is in everyone’s best interests to conserve these precious resources, Kahramaa is supporting the government in reaching its ambitious Vision 2030 goals.