The Gulf region offers massive business potential for companies involved in Electrical Generation

About Qatar

Qatar is emerging as one of the most dynamic economies in the Middle East. It has the highest per capita income in the world and enjoys one of the fastest growing GDP's, reaching 13.3% real GDP, and valued in 2009 at over $US80 billion.

The economy is rapidly expanding in practically every sector and industry. A combination of government investment and the participation of multi-national companies is creating a culture of opportunity.

The government is using its vast oil and gas wealth to create a society that provides opportunities for all. It has committed over US$140 billion for investment, infrastructure and expansion in a wide range of sectors, including energy, health, education, transport, infrastructure and tourism.

Reliance on crude oil exports has been replaced by an ambitious and progressive approach to the management of the nation's economy, which focuses on developing Qatar's huge natural gas reserves and its expansion of liquefied natural gas, petrochemicals and condensates production. This is supported by a far reaching program of economic liberalization and diversification into a more broadly based economy.

Qatar is quickly becoming the world's single largest producer of LNG, and by 2010 will have a production capacity of 77 million tons per year. New oil capacity also continues to come on stream, thus boosting export volumes. By 2012, Qatar will be producing the equivalent of 6 million barrels of oil.

The economy is characterized by low private consumption and a high national savings rate, making Qatar a very attractive financial market within the GCC, with a high asset growth rate.

Qatar's Energy Sector

Energy & Related Industries

The energy sector in Qatar is fuelling significant economic growth- by 2010 Qatar is likely to be the world's single largest producer of liquefied natural gas (LNG), with a projected production capacity of 77 million tons per year, some 3 times current production.

Qatar's liquefied natural gas industry is expanding fast, while new oil capacity continues to come on stream, thus boosting export volumes. Output of associated condensates - light oil extracted during gas production - is growing and other gas-based industrial projects (e.g: the Oryx Gas to Liquid facility) are reaching completion, further increasing Qatar's capacity in the energy sector.

In the oilfields, intensified development programs are increasing and oil production will exceed 1 million barrels per day (bpd) by 2011, which combined with LNG and GTL output will total some 6 million bpd equivalent.

Two gas super-trains are planned, each capable of producing 7.8m tones per year. They are expected to supply 15.6m tones per year to the US market from 2008. A similar amount is planned for the UK, also from 2008, and the world's largest liquefied natural gas import facility is currently being built at Milford Haven, a project which will bring 16 million tones of gas annually from Qatar into the UK gas transmission network. In September 2005 RasGas II signed a 25-year sale-and-purchase agreement with Chinese Petroleum Corporation of Taiwan to supply 3m tones/year of liquefied natural gas. Already Japan, South Korea, India and Taiwan are long term buyers and Italy and Belgium have also committed to buy Qatari gas, ensuring that Qatar's energy sector will enjoy long-term stability.

To supply gas to its global customer base, Qatar will expand its fleet of 20 vessels by around another 60, at a cost of some $15 billion, by 2009. On November 28, 2005, HE Yousef Kamal, Minister of Finance and Economy, announced a $3 billion deal with Samsung, Daewoo and Hyundai for 12 of the largest LNG carriers, as part of Qatar's strategy to optimize the total LNG value chain to its energy sector customers around the world.

Qatar launched the world's largest liquefied natural gas refinery project in November 2005, further strengthening its energy sector, with production mostly for export to the U.S. In the $14-billion strategic alliance between the two countries, Qatar Petroleum has a 70% stake and ExxonMobil Ras Laffan III Limited, a subsidiary of the US oil major ExxonMobil, the remaining 30%.

On the manufacturing front, Qatar's first helium plant came on stream in August 2005. Qatar Vinyl Company announced, also in August 2005, a plan to triple its ethylene dichloride production capacity. Qatar aims to be a major producer of condensate, naphtha and lube oil by the end of the decade. Meanwhile Qatar Steel Company has embarked on a program to increase its iron and molten steel capacity by a half while Qatar Petroleum is working on a joint venture with Norsk Hydro to set up an aluminum smelter plant.

Electricity Sector

Production & Substations

Electricity production at the end of the second quarter of 2008 stood at approximately 4263 Megawatts (MW), and is expected to double by 2011 to more than 8707 MW.

This clearly shows continuous and tremendous growth in Qatar's electricity sector. Within eight years (2000 - 2008), the number of high voltage primary substations increased from 87 substations to 139 substations (2nd quarter of 2008), and is expected to reach 269 substations by 2011.

The number of distribution substations increased in association with the high voltage transmission primary substation, and exceeded 8000 distribution substations (2nd quarter 2008); it is planned to reach 10.000 distribution substations by the year 2011, in order to cope with the substantial increase in economic activity in Qatar at all levels.

Cables & OHL

This large increase in the number of primary substations was accompanied by the massive expansion in the cables and overhead lines (OHL) network in the 11 kV, 66 kV, 132 kV and 220 kV voltage levels. Up to 2008, the length of double circuit cable line laid stands at approximately 1064 kilometers (km) the OHL stands at 1820 km. The cumulative investment (2000 - 2008) calculated in the electricity sector stands at US$9.64 billion.

NCC & DCC

The main electricity transmission network is monitored and managed by KAHRAMAA's National Control Center (NCC), and the distribution network is monitored and managed by the distribution control centre (DCC). These centers are equipped with state-of- the art technology and operated by qualified and experienced staff.

Electricity Expansion Projects

The highly sophisticated power equipment installed at various substations, is operated and maintained by the qualified and experienced engineers and staff of KAHRAMAA, making the electricity transmission and distribution system highly reliable and dependable.

The development and expansion projects of Qatar Electricity Transmission Networks attract the attention of major international companies, as KAHRAMAA\s projects are deemed among the largest package projects in the world. The last awarded project of electricity network expansion - Phase VIII, for example, included contracts worth more than US$ 3.5 billion. There is the impending project of a Phase IX Network.

Future expansion is expected to be worth more than that of Phase VIII. KAHRAMAA's Department of Technical Affairs is responsible for all contract matters and managing these projects to finish on time.

GCC Interconnection Grid

KAHRAMAA is also ready to join the GCC Electricity Interconnection Grid. Several 400 kV transmission substations, overhead lines, cable circuits and NCC development projects are under construction to ensure that they are completed in time to meet the GCC electricity interconnection requirements.

Electricity Demand

Demand for electric power in Qatar has increased manifold over the past fifty years; for example, demand registered, as system maximum load on 10th of September 1988 was 941 MW while it reached 3550 MW on 10th September 2007. The latest demand registered as on 30th of August 2008 is 3990 MW. Average electricity consumption per capita had increased from 12.963 kilowatt hours (kWh) in 1997 to 17.774 - kWh in 2007 less transmission and distribution losses. Electricity customers' number increased as well within the last ten years from 132.429 in 1998 to 191.476 customers in 2007.

Oil & Gas

The rapid economic development of Qatar has been largely driven by oil and gas revenues. Over half of the Government's $130 billion committed to investment across Qatar's economy over the next few years will be spent on further developing the oil and gas sector, and in particular liquid natural gas production and export facilities. But a wide range of other economic sectors will also benefit.

The Government's aim is to make Qatar the world's leading producer of liquid natural gas by 2010, and to help this end and further enhance Qatar's economic development the Qatar Financial Centre (QFC) attracts international finance and related companies to provide corporate finance, venture capital, project finance, private equity, wealth management, insurance and re-insurance, investment banking and Islamic banking and other investment strategy and investment management services.

Numerous large-scale liquid natural gas projects are in currently in progress and nearing completion in Qatar, such as the Oryx, QatarGas 3 and QatarGas 4 liquid natural gas production facilities. There is also a large-scale expansion of the liquid natural gas shipping fleet, helping Qatar to realise its investment strategy of optimizing the total liquid natural gas value chain to its customers around the world.

In line with its plans to be a leading global force in the field of oil and gas, Qatar will soon establish an International Mercantile Exchange dedicated to energy trading. The proposed International Mercantile Exchange is to be based in the Energy City development which is currently under construction.

A memorandum of understanding to pave the way to set up the International Mercantile Exchange has been signed between Gulf Energy and the Qatar Financial Centre Authority (QFCA). The International Mercantile Exchange will be a new generation of exchange, featuring some of the most advanced oil and gas trading platforms in the world. The Qatar Financial Centre Regulatory Authority (QFCRA) is to provide the regulatory framework for the International Mercantile Exchange.

Undoubtedly international finance companies located within the Qatar Financial Centre (QFC) will be ideally positioned to be involved with these exciting developments in the oil and gas as well as other sectors over the next few years.