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Qatar: reducing nuclear use, increasing natural gas demand

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Sunday, 12 June 2011 22:09

Qatar reducing nuclear use, increasing natural gas demand

Global Arab Network - Qatargas Chief Executive Officer Sheikh Khalid Bin Khalifa Al Thani, Chief Executive Officer expects a higher demand for Liquefied Natural Gas (LNG) natural gas with many countries considering reducing the use of nuclear energy in the light of the Japan nuclear crisis following the Fukushima Daiichi power plant destruction in earthquake that struck the country on March 11. Speaking to Qatar News Agency (QNA) in an exclusive interview, Sheikh Khalid alluded to the discussions with Japan that would elaborate conditions for a number of long-term contracts to increase of LNG exports to Japan.

Qatargas has committed to supply for one year (from April, 16 2011) additional LNG volumes equivalent to 60 plus conventional LNG cargo to Japan, demonstrating the company's commitment to support long-term Japanese customers, he said. Qatargas supplies a total of 6 million metric tons per annum (mtpa) of LNG from Qatargas 1 to Japan under long term contracts. The first shipment of LNG was delivered to Japan in 1997. On the possibility of exporting of additional 3 million metric tons of LNG to Japan, Sheikh Khalid said such decision could be determined by the Japanese government's policy during the next phase in terms of increasing or decreasing the country's reliance on nuclear energy.

Qatargas would increase LNG shipments to Dubai, UAE he said, The first the first cargo was despatched in December 2006 through a Q-Flex vessel with LNG produced from Qatargas 2. In 2008 Qatargas, Shell and Dubai Supply Authority (DUSUP) signed a series of agreements under which LNG would be supplied to DUSUP primarily from Qatargas 4 from 2011.

On the role of receiving terminals in propelling Qatar as a top LNG producer, Sheikh Khalid said, "Qatargas has invested in long term capacity creation through the construction of large mega-trains and ships to transport our LNG efficiently; building of terminal capacity in different markets such as the UK (South Hook) and US (Golden Pass).

This creates flexibility and capacity in these markets. By securing access to the liquid gas markets of the US and the UK, Qatar was able to rapidly expand its LNG production. "Since our contracts into these markets have diversion rights we are able to capture new market opportunities as they appear rather than most projects which seek to do this only prior to their Final Investment Decision.

Our terminals in the UK and US provide us with tremendous optionality and will continue to do so for many years into the future. Furthermore, these terminals will also facilitate increased deliveries of LNG to the UK and US as and when the market requires it." At present Qatargas does not have plans for any new receiving terminal. The responsibility for future investments in overseas energy related infrastructure lies with Qatar Petroleum International (QPI), he said. On matching global environment standards, Sheikh Khalid said, "Qatargas is focused on reducing our emissions to the lowest levels possible to meet or beat the international standards. For example reduction in emissions from Q-Max/Q-Flex vessels (cutting the carbon costs of moving each molecule of LNG) compared to conventional LNG vessels, jetty boil off, flaring reduction by 98%, sulfur reduction programmes on our existing facilities, Laffan Refinery has zero flaring in line with EU regulations; waste gas from QG2 start-up is recycled in QG1 operation.

Continuing on the expansion plans Sheikh Khalid said, "We are in the process of debottlenecking the existing facility LR-1, adding extra capacity without major investment. The expansion of refinery''s portfolio supports Qatar''s vision of improving product distribution domestically and fully complies with international customers'' demands for cleaner fuel products," he said.

On the status of Qatar Helium 2 project that is slated to start production in 2013, Sheikh Khalid said, "Production is targeted for early 2013. When completed it will be the largest facility of such kind in the world. The EPS contract has been awarded to Air Liquide with whom we have a sales and purchase agreement for 50% of the production, 30% with Linde Gases and 20% with Iwatani Corporation. Helium sales are expected to reach 1.3 billion cubic feet per year." Regarding marketing, he said, "Qatargas has existing long-term supply contracts around the world. Asia with its large importers like Japan, China and India continues to be an important market for us. Qatargas is focused on meeting its commitments to all its customers, including those in the liquid markets of the UK and the US."

Replying to a question on how much LNG Qatar exports to the UK annually and its partnership with Centrica, the CEO said, "Qatar supplied the UK with 15% of its total gas demand which will go up to 50% by 2025. Our partnership with Centrica is significant, it underscores Qatargas'' commitment to the UK as one of key gas markets." On the company''s recent announcement of exporting additional LNG cargo to Japan over the next 12 months, Sheikh Khalid said, "Qatargas is doing all it can to support Japan''s requirement for stable supplies of energy.

Qatargas is uniquely placed to help Japan during its moment of need and the speed at which Qatargas has been able to secure additional LNG supplies for Japan is a testament of our flexibility and commitment to our long-term customers." On the new LNG market in Dubai, he said, "Qatargas 4 project has a long term sales agreement with Shell, which will supply LNG to Dubai, starting this year."

Qatargas, indeed, is one of the major companies with significant contribution to Qatar''s economy. The LNG major''s overall investment so far is around $36 billion. Total investment between 2011 and 2017 will be around 4.5 billion USD (includes Jetty Boil Off Gas (JBOG) project, Laffan Refinery''s Receiving and Loading Facility Project (RALF), Laffan Refinery 2, Diesel Hydro Treator (DHT) and Helium 2, said the CEO.

"Qatargas is currently undertaking the Jetty Boil-Off Gas Recovery Project, (JBOG) which will minimise LNG boil-off gas flaring at LNG berths by making productive use of the gas that boils off during loading of LNG carriers at the Ras Laffan Port. "Besides, the existing Qatargas 1 operations we have recently completed a suite of significant NOx (Nitrogen Oxides) reduction projects, with direct benefits to air quality in the region and the new mega-trains have been designed with highly sophisticated NOx mitigation equipment, which easily meet the new strict Ministry of Environment NOx emission limits.

"The mega-train design and operating philosophy allows for substantial reduction in CO2 emissions per ton of LNG produced versus conventional LNG train technology. Qatargas also has an established track record in dealing with mitigating and offsetting environmental effects of its projects, such as the QG2 and QG3&4 coral translocation and other biodiversity initiatives which we have developed or are proactively involved with on a voluntary basis.

"Qatargas is concerned with promoting environmental education and awareness and as part of its corporate citizenship initiatives and we are actively involved with local schools and environmental organisations to promote the message of environmental protection and management and we acknowledge and develop the role that responsible industry should play in this."

Qatar is proactive on sustainable development and environment concerns. It is one of the pillars of Qatar National Vision 2030. Pursuing this initiative Qatar had suggested to the World Trade Organisation on exempting gas and its byproducts from customs duties. Other Gulf states, too, are pushing for this. Commenting on this Sheikh Khalid said, "As the world''s largest LNG producer Qatar supports this wholeheartedly. From a Qatargas perspective, I feel the WTO should pay attention to this initiative given the significant environment value it possesses and the impact it will have on reducing our carbon footprint.

Global Arab Network

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