Country Report Qatar January 2011

Economic policy: Government shifts focus to petrochemicals after LNG

Qatar is due to hit its liquefied natural gas (LNG) production capacity target of 77m tonnes/year (t/y) next month, and is already the largest LNG exporter in the world. It has now turned its attention to expanding its already considerable petrochemicals industry, and on December 20th the deputy prime minister and energy and industry minister, Abdullah bin Hamad al-Attiyah, told reporters that the country had set a target of producing 18m t/y of petrochemicals by 2016, up from around 7m t/y at present.

Projects on the drawing board include the expansion of existing plants belonging to the Qatar Petrochemical Company (QAPCO) and the Qatar Fertilisers Company (QAFCO), as well as the start-up of new ones (December 2010, Economic performance). The rationale behind the new focus-part of the state's economic diversification strategy-is to promote the establishment of large-scale domestic gas-based downstream industries, which, it is argued, cost much less than setting up LNG facilities and create more local job opportunities.

Mr Attiyah said that Qatar had no immediate plans to lift a moratorium on further extraction of gas from the North Field (which was imposed in 2003 and which is expected to remain in place until at least 2013). He added that Qatar would "debottleneck" its existing LNG plants if it needed extra gas for domestic use. The process involves modification of existing LNG "super-trains" to boost production efficiency. In 2002-04 one of Qatar's largest gas companies, Qatargas, carried out such procedures on three of its trains, which resulted in an increase in annual capacity from 6m t/y to 10m t/y. Mr Attiyah hopes that by implementing the procedure, Qatar can expand LNG production from its six super-trains (each with a capacity of 7.8m t/y) by an additional 10m t/y.

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