Gulf-Times (Qatar): Shell will be among the biggest investors in Qatar, says official

(Linda Cook: ‘Investing in Qatar is close to my heart’)

Published: Thursday, 15 March, 2007, 08:56 AM Doha Time 
By Pratap John

LONDON: Royal Dutch Shell will be one of the biggest foreign investors in Qatar by 2010, the company’s executive director (Gas & Power), Linda Cook has said.

Shell’s two projects in Qatar – Qatargas IV and Pearl GTL are long-term, cost billions of dollars, depend on innovative technology, advanced skills and access to global markets, she said here yesterday.

“I have been involved with these projects from day one. And it has been exciting to see both begin construction within the last 14 months. They will come online by the decade-end,” she said at the 4th Annual Conference on ‘Finance & Investment in Qatar’ at the Dorchester Hotel here.

Investing in the energy sector was a “serious and difficult business”, Linda pointed out. There are many risks attached to it. Investments are often in billions and projects can last decades.

“But Qatar is a different case altogether. Investing in Qatar is close to my heart. Deciding on major projects can be easier when they are in a country that not only has huge natural resources, but also superior attributes,” she said.

Bloomberg, meanwhile, has quoted Shell’s annual report as saying that the Anglo-Dutch company relied on the advancement of its gas-to-liquids project in Qatar for more than half of the gain in its proven reserves last year.

Shell, based in The Hague, had proven oil and gas reserves equal to 11.807bn barrels of oil at the end of 2006, including its share of equity-owned investments, up from 11.466bn barrels at the end of 2005, according to the report, filed with regulators on Tuesday.

In London, Linda told the conference that Qatar had a stable investment climate and world class infrastructure. It welcomed foreign investments and was not burdened by an excessive bureaucracy, she added.

Qatar’s future depended largely on its ability to make the best use of its natural resources, particularly natural gas.

With estimated recoverable resources in excess of 900tn cu ft, Qatar holds about 15% of the world’s gas resources. That’s about 50 times Britain’s reserves and nearly five times those of the US. And demand for this cleanest of hydrocarbons is increasing rapidly.

Qatar was focused on becoming a leading energy supplier to markets around the world, leveraging two key natural gas technologies – LNG and GTL, she said.
Linda said Qatar was already a major LNG producer, supplying some 25mn tonnes, about 15% of the global total last year. With many new projects under construction, capacity will increase to some 77mn tonnes by the decade-end.

The Qatargas IV project, in which Shell has a stake, will start delivering LNG to North America and other markets at the end of the decade. It involved the construction of a 7.8mn tonnes a year LNG train, the largest in the world. Six such LNG trains are being constructed in Qatar now.

“The speed with which Qatargas IV project has progressed since our agreement in late 2005 is a testament to how efficiently things are managed in Qatar.

“And the response of the financial institutions to the debt financing for this and other projects suggests they share our appreciation of the strength of such projects in Qatar,” she said.

Shell already supports about 30% of the world’s LNG fleet. “This is why Qatar Gas Transport Company (Nakilat) has chosen Shell to manage its fleet of 27 of the largest LNG carriers ever built.”

Linda said: “These big LNG projects do not move forward, however, without customer commitments. Securing the long-term demand to underpin the massive investment and financing is critical. International companies such as shell can help link Qatari gas to diverse and value-adding markets.

“We offer access to LNG import facilities and marketing expertise in North America, Europe and India.”

Unlike LNG, the gas-to-liquids (GTL) industry is still in its infancy, Linda said. GTL is a chemical process for converting natural gas into high quality synthetic products including liquid fuels. Shell has been working on GTL for several decades, gaining vital experience with its pilot plant in Malaysia.

“As well as testing our proprietary catalyst and process, we have learned to achieve high operating standards, more than 99% plant reliability in 2006. And we have also been working hard to develop global markets for GTL products, which will play an important role in improving engine efficiency and reducing emissions.

“HH the Emir Sheikh Hamad bin Khalifa al-Thani and HE Abdullah bin Hamad al-Attiyah (the Second Deputy Premier and Energy Minister) had the foresight to recognise and pursue the potential of GTL early on.

“They see GTL as an opportunity to diversify their natural gas exports and access new markets. Last month, we laid the foundation for the largest and most advanced GTL plant at Ras Laffan,” Linda said.

“Contracts worth over $10bn relating to Pearl GTL project have already been placed with vendors, equipment suppliers and engineering and construction firms from around the world.

“I have no doubt Qatar’s bold choice to take leadership in GTL, as well as our own commitment to this business will pay off,” Linda added.