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Qatar Major Projects
Qatar Liquefied Natural Gas Company (Qatargas)
 The main activities of Qatargas are divided into two main projects with separate shareholder groups: The upstream joint venture (offshore production and the onshore receiving facilities) and the downstream joint venture (onshore LNG Plant).
The Qatargas upstream joint venture has equity held by QP (65%) and four major energy and trading companies, TotalFinaElf (20%), ExxonMobil (10%), Mitsui (2.5%) and Marubeni (2.5%). The Qatargas downstream joint venture has equity held by QP (65%), TotalFinaElf (10%), ExxonMobil (10%), Mitsui (7.5%) and Marubeni (7.5%).
New Developments at Qatargas
The Second Phase of development
involves the constuction of a fourth LNG train with an estimated
capacity of 4.8 mtpa. In October 2001, a MOU was signed
with Spain’s Repsol and Italy’s Enel for jointly carrying
out a feasibility study for the fourth train. Qatargas’
existing facility has space for a total of six trains.
Qatar Liquefied Natural Gas
Company II (Qatargas II)
In June 2002, QP and ExxonMobil
announced the setting up of a joint venture, provisionally
referred to as Qatargas II, with the primary aim of supplying
up to 14 mtpa of LNG to the UK market. QP and ExxonMobil
have signed a HoA in this regard, reported to be the world’s
largest LNG contract. QP is reported to be interested in
taking a 70% equity stake in the venture, with ExxonMobil
holding the balance of 30%. Qatargas II was set up as part
of Qatargas’ expansionary plans to add trains 5 and 6 to
its existing three trains and the planned train 4. The two
new super-trains could each have a capacity as large as
7 mtpa, with the first train scheduled to start production
in 2006/07 and the second to commence in 2009.
Ras Laffan
Liquefied Natural Gas Company (RasGas)  RasGas
is a $3.3 billion grassroots LNG venture owned by QP (63%),
ExxonMobil (25%), Kogas (5%), Itochu Corporation (4%), and
LNG Japan Corporation (3%). At present, RasGas has rights
to produce and sell 10 million tons of LNG per year and
additional quantities of related hydrocarbon products for
a period of not less than 25 years. Production from RasGas’
first and second LNG trains began in June 1999 and April
2000 respectively. Each of the first two trains has a capacity
of just over 3 mtpa.
In October 2000, RasGas invited
tenders for the construction of the third and fourth LNG
trains at its plant, each having a capacity of 4 mtpa. In
March 2001, RasGas II was formed to execute the planned
expansion. The third train is scheduled to come into production
in 2004 and the fourth train by 2005, bringing RasGas and
RasGas II’s anticipated LNG exports to around 13.4 mtpa
by 2005.
November 2002 marked the sixth
anniversary for Qatar as an LNG producer. Qatar has established
itself as the Gulf’s leading gas exporter, delivering over
36 million tonnes of LNG to customers in the Far East, Europe
and the US. In 2001, Qatar exported 12.8 million tons of
LNG.
Ras Laffan Liquefied Natural
Gas Company II (RasGas II)
An Emiri decree issued on 26th
March 2001, announced the setting up Ras Laffan LNG Company
II (RasGas II). The project is primarily aimed at providing
Petronet of India with 7.5 mtpa of LNG.
RasGas II was created with a capital
of QR 2 billion ($549.5 million), owned by QP (70%) and
ExxonMobil (30%), with an option for Petronet to take up
a 5% stake. In April 2001, RasGas II concluded the first
phase of a sales and purchase agreement (SPA) with Petronet
of India. The SPA, which covers a period of 25 years, involves
the shipment of 5 mtpa to a terminal in Dahej (Gujarat,
India) and 2.5 mtpa to a terminal in Cochin (Kerala, India),
with shipments to start in December 2003. Qatar’s pricing
advantages, favourable location and reserves were the determining
factors in Petronet’s selection of RasGas/ExxonMobil over
six other bidders.
In April 2001, RasGas II awarded
the downstream EPC contract for the third LNG train, to
a consortium consisting of Japan’s Chiyoda Corporation,
Mitsui, Italy’s Snamprogetti and Qatari Almana Group. Completion
of the third train is expected by 2004.
In June 2001, RasGas II signed
a sales and purchase agreement (SPA) for the supply of 3.5
mtpa of LNG to Italy’s Edison Gas for 25 years. The consortium
constructing the third train have options in their successful
bid, to build the fourth train, with deliveries to Edison
Gas slated to begin in 2005. The contract marked a very
important success in the company’s marketing efforts as
negotiations for this deal took over three years to conclude.
The Dolphin
Project  The
Dolphin Project is the first export oriented pipeline project
in the GCC region and paves the way for the creation of
a GCC gas grid originating in Qatar. Promoted by the UAE
Government’s Offsets Group (UOG), the Dolphin project has
already received outline commitments from UAE for up to
2 billion cubic feet per day (cf/d) of gas. In June 2000,
UOG announced the formation of a company ‘Dolphin Energy
Ltd’ (DEL), to manage the project on its behalf. The ownership
structure of the company is 51% UOG and 24.5% each by TotalFinaElf
and Occidental Petroleum. France’s TotalFinaElf and Occidental
of the US were selected as strategic partners for the project,
with TotalFinaElf responsible for the upstream part of the
project and Occidental for the midstream and downstream
marketing. Two upstream MoUs have been signed, one with
ExxonMobil and the other with TotalFinaElf.
The Dolphin Project is scheduled
in two phases. The first phase of the project valued at
$3.5 billion will involve production and distribution of
2 bn cf/d of gas, through a 350-km sub sea pipeline from
Qatar’s North Field to Taweelah in Abu Dhabi and Jebel Ali
in Dubai (Fig 3.4). Gas deliveries are set to start by the
end of 2004.
The second phase of the project,
still in its initial planning stages, will look at the possibility
of further downstream operations involving Oman and other
countries.
Enhanced Gas Utilisation (EGU) Project
An agreement to tap additional
North Field gas for domestic projects and regional exports
was signed in early 2000 by QP and ExxonMobil Middle East
Gas Marketing Limited, a subsidiary of ExxonMobil Corporation.
Under the EGU Project, additional
North Field gas will be developed through a new upstream
gas development, with power generation (Ras Laffan IWPP)
representing an initial major user. ExxonMobil intends to
extend the EGU Project through incremental pipeline exports
as well as Qatari industrial salecontracts.
Natural
Gas Liquids (NGL) 
NGL-1 :
The first NGL plant commisioned
in 1974, was established with the aim of utilising onshore
associated gas from the Dukhan field. This facility provides
for the NGL’s stripped from the Fahahil Plant (degassing,
compressing and NGL stripping plant located along the Dukhan
field) to be separated into ethane rich gas, propane, butane,
and condensate.
NGL-2 :
The second NGL plant commissioned
in 1980, was established with the aim of utilising offshore
associated gas. This plant obtains NGL’s stripped from three
offshore crude oil production platforms and separates it
into methane rich gas, ethane rich gas, propane, butane,
and condensate.
NGL-3 :
Also referred to as the North
Field Gas Plant (NFGP), this plant was commissioned in 1991
and debottlenecked in 1997, to process an additional 240
mn cf/d of gas from Qatargas. The NFGP was originally designed
to process raw gas and unstabilised condensate, separated
from the North Field Alpha Offshore field.
NGL-4 :
The NGL-4 project is designed
to increase the recovery of Natural Gas Liquids from the
Dukhan Arab D reservoir and the North Field. The NGL-4 plant
more than doubles QP’s NGL capacity and is dedicated both
to export markets and to domestic demand which includes
demand from the QAPCO and Q-Chem projects.
NGL-4 increases Qatar’s recovery
of natural gas liquids from North Field Phase 1 of Ethane
(875,000 tpa), Propane (735,000) and Butane (490,000 tpa)
to meet growing demand for these products as a petrochemical
feedstock.
Three NGL-4 related financings,
each with a value of $400 million have been brought to market
since the middle of 1999 and two financing programs have
been successfully completed. QP has utilised innovative
receivables backed structures, the latest utilising a ratings-enhanced
commercial paper (CP) issue. QNB participated as arranger
in the first two NGL-4 related financings.
Gas
to Liquids Projects (GTL)  QP
continues to research other avenues for the utilisation
of the country’s natural gas resources.
Technologies for the direct conversion
of natural gas into globally marketable and more easily
transportable liquid products have evolved significantly
in recent years and are of particular interest as a potential
adjunct to direct exports of LNG and natural gas.
QP’s aim of progressing rapidly
on GTL projects can be seen through the following Qatar
GTL project, and five other projects which are at various
levels of negotiation :
Qatar GTL Project:
In July 2001, QP and South Africa’s
Sasol Synfuels International (Sasol) signed a joint venture
agreement to develop a GTL project at Ras Laffan with estimated
costs of $1 billion. EPC bids for the project were received
in the fourth quarter of 2002 and the plant is likely to
start production by the end of 2005
The project which is based on
Sasol’s slurry phase distillate technology, will convert
natural gas into 33,750 bpd of high grade fuels from two
trains. The GTL plant will use as feedstock about 330 mn
cf/d of gas from ExxonMobil’s enhanced gas utilisation (EGU)
project, and is projected to produce around 24,000 bpd of
high purity diesel, 9,000 bpd of naphtha and 1,000 bpd of
LPG. An expanded output option could enable production to
reach around 120,000 bpd by 2010. Exports from the project
are destined for markets in the Far East and Europe.
ExxonMobil GTL Project:
ExxonMobil proposed a gas to liquids
(GTL) project in June 2001. QP has signed a letter of intent
with ExxonMobil for carrying out a technical feasibility
study for the proposed project at Ras Laffan. The plant
could have a capacity in excess of 80,000 bpd. Development
costs for this integrated upstream/downstream project could
exceed $2 billion.
Shell GTL Project: Shell has made
proposals for a 140,000 bpd GTL plant and a letter of intent
has been signed with QP in this respect. Senior officials
from Shell reiterated their commitment in the project at
the recently concluded ‘Gastech 2002’ conference in Doha,
where it was noted that total project costs could exceed
$4 billion.
Other Proposed GTL Projects: Among
other proposed GTL projects are Canadian company Ivanhoe
Energy’s 185,000 bpd plant, ConocoPhillips 50,000 bpd plant
and Marathon Oil Company’s 80,000 bpd plant.
Arab C Gas Recycling
This proposed
development is similar in nature to the recently-completed
Arab D gas recycling project at onshore Dukhan. The project
is aimed at recovering 36,000 bpd of condensate from 300
mn cf/d of wet gas, and is valued at $290 million.
Gas-Based and Other Industrial
Projects:
In addition to its roles as the
basis for the LNG industry, and as a fuel input for power
generation, natural gas is utilised in a wide range of industries
as a feedstock to produce various value-added products for
both domestic consumption and export. These projects include
the following:
Qatar
Fertiliser Company (QAFCO)  QAFCO
is a joint venture between Norsk Hydro of Norway and QP,
who respectively own 25% and 75% of the shares. It was established
by an Emiri Decree in 1969 to produce ammonia and urea.
Currently the QAFCO complex in Mesaieed comprises of three
completely integrated trains; QAFCO-1 (1973), QAFCO-2 (1979),
and QAFCO-3 (1997), with each train being made up of two
units, one for the production of ammonia and the other for
urea.
Following the completion of the
QR 2 billion QAFCO-3 project in March 1997, production capacity
now stands at 3,800 tons per day (tpd) of ammonia and 4,500
tpd of urea. The company is now the largest producer of
fertiliser in the Middle East, with total production reaching
1.4 million tons of ammonia and 1.7 million tons of urea
in 2001 .
QAFCO currently exports ammonia
and urea to more than 20 countries around the globe, and
its main markets are in South East Asia, India, USA, Australia,
and South Africa. In 2001, QAFCO exported 0.5 million tons
of ammonia, and 1.6 million tons of urea.
QAFCO-4
In accordance with the State of
Qatar’s policy to exploit the nation’s huge natural gas
reserves and expand its industrial base, and to keep up
with Qatar Fertiliser Company’s modernisation policy, the
‘QAFCO IV’ expansion project was launched in 2000. Project
costs are in excess of $500 million, and the project will
add 2,000 tpd of ammonia and 3,200 tpd of urea to existing
capacity. On completion in 2004, QAFCO’s production capacity
will rise to 2.8 mtpa of urea and 2 mtpa of ammonia, making
the company the world’s largest fertiliser producer from
a single site. The EPC contract was awarded in July 2001
to Krupp Uhde of Germany.
Qatar Fuel Additives Company (QAFAC)
 QAFAC
is owned by QP (50%), Chinese Petroleum Corporation (20%),
Lee Chang Yung Chemical Industry Corporation (15%) and International
Octane Ltd. of Canada (15%). QAFAC’s plant in Mesaieed has
a production capacity of 620,000 tpa of Methyl Tertiary
Butyl Ether (MTBE), and 950,000 tpa of methanol.
Total project development costs
were in the vicinity of $650 million, with a project finance
package of $350 million being put into place. The plant
started methanol and MTBE production respectively in June
and July 1999. The first shipment was exported to Canada
in August 1999. Production volumes are now running close
to capacity. In 2001, QAFAC produced 911,860 tons of methanol
and 505,591 tons of MTBE. In May 2002, an agreement was
signed with Iran for the supply of 275,000 tons of MTBE
over a seven-year period, commencing from July 2003.
Qatar Petrochemical Company (QAPCO)
 QP
owns 80% of QAPCO with the remaining capital of 20% held
by Atofina (Chemical arm of France’s TotalFinaElf). QAPCO
commenced full commercial operations in 1981 and produces
high quality Ethylene, Low Density Polyethylene (LDPE) and
Sulphur. QAPCO’s QR 1.4 billion expansion project which
was completed in 1996, raised production capacity of Ethylene
from 330,000 tons per annum (tpa) to 550,000 tpa.
In 2001, QAPCO recorded a 17%
increase in profits to QR 497 million ($137 million).
QAPCO has conducted a feasibility
study for the debottlenecking of the existing ethane cracker
plant, so as to further increase the capacity from the current
550,000 tpa to 720,000 tpa. The project is scheduled for
a 2004 completion. Debottlenecking of the LDPE line, has
led to an increase in the production capacity from the 275,000
tpa to 390,000 tpa. This expansion has confirmed QAPCO’s
status as the largest producer of LDPE in the Middle East.
Qatar Vinyl Company (QVC)
 QVC
is a joint venture between QAPCO (31.9%), QP (25.5%), Norsk
Hydro of Norway (29.7%) and Atofina of France (12.9%). Krupp
Uhde of Germany were responsible for construction of the
core process unit of the plant, while Italy’s Technip covered
the development of a 130MW-power generation facility.
The project (70% or $475 million)
was financed through a syndicated limited recourse loan
lead-arranged by BNP Paribas, Credit Suisse First Boston
and Arab Petroleum Investment Corporation, with other arrangers.
The project was formally opened by HH the Emir Sheikh Hamad
Bin Khalifa Al-Thani on June 21st 2001. The $680 million
project has a capacity to produce 180,000 tpa of Ethylene
Dichloride (EDC), 230,000 tpa of Vinyl Chloride Monomer
(VCM) and 290,000 tpa of Caustic Soda. Production of EDC
and Caustic Soda began in April 2001, with VCM production
starting in June 2001. QAPCO provides the Ethylene feedstock
and also supplies facilities to the company through horizontal
integration.
QAPCO, Norsk Hydro and Elf Atochem
share marketing responsibilities with respect to QVC’s production.
South East Asia and Australia buy a large part of QVC’s
production.
QVC is closely examining a proposal
for expanding facilities and also for the setting up of
a plant to manufacture polyvinyl chloride (PVC).
Qatar Chemical Company (Q-Chem)
 In
November 1997, QP (with a 51% interest) and Chevron Phillips
Chemical Company (with a 49% interest) signed a joint venture
agreement to construct a petrochemical complex, called Qatar
Chemical Company (Q-Chem), in the Mesaieed industrial area.
Construction of the $1.2 billion,
500,000 tpa ethylene cracker plant commenced during 1999.
The plant which is currently in production testing (November
2002), obtains Ethane and Butane feedstock from the NGL-4
facility. The Ethylene is fully converted into 273,000 t/y
of High-Density Polyethylene (HDPE), 189,000 t/y of Low-Density
Polyethylene (LDPE), and 47,000 t/y of Hexane-1. Q-Chem
signed a $750 million financing agreement with nine international
and regional banks (including QNB) in July 1999. A consortium
of Kellogg Brown & Root and Technip constructed the
plant. Kellogg Brown & Root supplied the Ethylene technology,
and Phillips the Hexane-1 and Polyethylene technology.
Qatar Chemical Company II (Q-Chem
II)
Qatar Petroleum, with a 51% stake
and Chevron Philips Chemical Company (CPC) with a 49% stake
are partners in this joint-venture, which will see the construction
of a ‘world-scale’ high density polyethylene (HDPE) and
olefins plant, adjacent to the Q-Chem plant in Mesaieed.
The ethane feedstock for the project will be sourced from
the Ras Laffan Ethylene Cracker project, which will be fed
with natural gas from the North Field. The project is estimated
to cost well in excess of $1 billion, with a production
capacity estimated at around 1.2 mtpa. The financial advisor
for the project is Royal Bank of Scotland. The project is
scheduled for completion by 2007.
Qatofin
This is a joint venture between
QAPCO (63%), Atofina (36%) and QP (1%), which will see the
establishment of a Linear Low Density Polyethylene (LLDPE)
plant with a 450,000 tpa capacity. The plant will be located
in Mesaieed, adjacent to the QAPCO facilities. The ethane
feedstock for the plant will be supplied from the Ras Laffan
Ethylene Cracker project. The financial advisory contract
for the project has recently been awarded to HSBC.
Ras Laffan Ethylene Cracker (RLEC)
This venture between Q-Chem II
(53.31%), Qatofin (45.69%) and QP (1%), is primarily set
up with the aim of supplying the Q-Chem II and Qatofin projects
with ethylene feedstock. The ethylene cracker unit will
be located at Ras Laffan and the ethylene feedstock will
be transported via pipeline to Q-Chem II and Qatofin in
Mesaieed.
Qatar Petroleum Refinery (formerly NODCO)
The Qatar Petroleum Refinery,
formerly called The National Oil Distribution Company (NODCO),
was set up in 1968, primarily with the aim of realising
self-sufficiency for Qatar in refined products in addition
to providing surplus production for export to world markets.
In 1999, an expansion project (NODCO-3) was initiated at
an estimated cost of $850 million. The expansion project
upgraded the company’s facilities and raised its refining
capacity from 60,000 bpd to 137,000 bpd with a 27,000 bpd
condensate processing unit.
The expanded facilities were officially
inaugurated by HH the Emir Sheikh Hamad Bin Khalifa Al-Thani
on January 12th 2002. The expansion incorporates the following
elements:
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Two new Condensate Refining
units with a daily capacity of 57,000 bpd, to refine
condensate products coming from Phase One of the North
Gas Field and from the Dukhan Arab-D project which was
commissioned in July 1998.
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De-bottlenecking of the
refining capacity of the existing units from 62,000
bpd to 80,000 bpd.
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The construction of a Fluid
Catalytic Cracking Unit to convert fuel oil into lighter
products.
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Upgrading the instrument
control & information systems of all the company’s
production facilities.
Infrastructure Projects
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Ras Abu Fontas B (RAF-B)
The existing Ras Abu Fontas
B station has a capacity of 990 MW of power and 33
million gallons of water a day. In November 2000,
Qatar General Electricity and Water Company entered
into a major contract with Alstom Power to install
three additional gas turbines which provided an additional
380 MW to Qatar’s power grid. A Project-Finance package
of $160 million was put in place in July 2001.
The second-phase of the expansion
could involve the addition of 27-30 million gallons a day
of desalination capacity and the installation of waste heat
recovery boilers.
Ras Laffan Independent Water and Power Project (IWPP)
The Ras Laffan Independent Water
and Power Project (IWPP) is Qatar’s first power project
developed on the build-own-operate-transfer (BOOT) basis
and will meet the rising domestic and industrial demand
for power and water. The plant will produce 750 MW of power
and 40 million gallons of water a day.
AES of the US was awarded the
developer role for initiation of the project as an IPP.
The Ras Laffan Power Company (RLPC) was formed in August
2001, as a holding company to undertake the project, in
which AES owns a 55% share, Qatar Petroleum 10%, Qatar Electricity
and Water Company 25%, and Gulf Investment Corporation 10%.
The Qatar Electricity and Water Corporation (Kahramaa) will
purchase power from the plant, under a long-term purchase
agreement. QP will provide the gas feedstock for the plant
and build a common cooling-water facility. Italy’s Enelpower
and Fisia Italimpianti will build the plant, which is anticipated
to be fully operational by May 2004. A $572 million financing
package for the project was finalised in November 2001.
Demand for electricity in Qatar
has increased from 72 MW in 1971 to 1,479 MW in 1997, while
demand for water has grown from 3 million cubic meters (mcm)
to 120 mcm during the same period. Electricity demand is
forecast to reach 3,300 MW by year 2005 and 3,800 MW by
year 2010.
Doha International Airport
 The
New Doha International Airport project is estimated to cost
over $500 million, and involves the construction of new
terminal facilities some six kilometers east of the present
facilities. International contractors have already been
invited to prequalify for the contract. The project received
a $55 million allocation in the 2001/02 State Budget and
another $57 million allocation in the recent 2002/03 State
Budget. A new committee has been set up to speed up the
implementation process in order to get the new airport to
open before the Asian Games in Doha in 2006.
Friendship Bridge
A proposed bridge, referred to
as the ‘Friendship Bridge’ will link Qatar and Bahrain via
a 45-kilometre causeway - the world’s longest fixed link.
A Danish consortium headed by renowned engineering consultants
Cowi, has recently completed a feasibility study.
Health, Education and Tourism Projects
Al-Ahli Private Hospital
The Al-Ahli Hospital is Qatar’s
first major private hospital and on completion will be one
of the biggest private hospitals in the Gulf. A $60 million
financing package for the project was arranged in 1999 with
QNB being the Lead Arranger. The 250 bed hospital will also
have an accommodation block for staff, and is scheduled
to open in the first quarter of 2003.
Education City
 The proposed ‘education city’
is to be set up under the aegis of the Qatar Foundation
for Education, Science and Community Development, which
was established in 1995 by HH the Emir Sheikh Hamad Bin
Khalifa Al-Thani. The facility will include higher educational
institutions at the university level, specialised training
in design arts and languages, and sporting facilities.
In April 2001 a landmark in higher
education standards was set, when the Qatar Foundation signed
an agreement with New York based Cornell University, for
establishing a new medical college in Doha. The proposed
‘Weill Cornell Medical College Qatar’ is to be built as
part of the upcoming ‘education city’ in Doha, and is due
for completion by 2004, although classes have started in
October 2002 at a temporary facility.
The ‘education city’ will have
the Medical College as its central feature and the college
will have an estimated operating cost of around $750 million
in the first 10 years. There is also a proposal to set up
a hospital with a 250-300 bed capacity, along with the medical
college.
Further in June 2001, Qatar signed
a memorandum of understanding (MOU) with two leading Canadian
educational institutions, College of North Atlantic (CNA),
and the Canadian Bureau of International Education (CBIE)
for the establishment of a world class college of technology
in Qatar. Both colleges will be part of the ‘education city’.
In October 2001, a ten-year comprehensive agreement was
signed between the College of North Atlantic and their Qatari
counterparts. The College of North Atlantic officially started
its first academic year in October 2002, at a temporary
facility.
A 45-hectare science park is also
planned as part of future development at the ‘education
city’.
Hotels
 The opening of the Inter-Continental
Doha, in November 2000, and the Ritz-Carlton Doha in October
2001, saw the injection of an additional 40% capacity to
the luxury hotels sector. The latest international hotel
chain to set up operations in Qatar, is the Movenpick, which
opened in January 2002, with a capacity of 154-executive
class rooms.
Four other new hotel properties,
to be managed by major international hotels groups, are
under development, which will increase current capacity
by an additional 836 rooms. The largest development among
these is the Four Seasons. Other names include the Holiday
Inn, Rydges Plaza Doha, and Doha Hilton.
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