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WEEKLY NEWSLETTER
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Qatar
Index
The Qatari government celebrated twenty years of
independence
in September 1991 with the inauguration of Phase One of
the North
Field development project. The gas project, in a
6,000-squarekilometer field off Qatar's northeast coast, is supervised
by
Bechtel of the United States and by Technip Geoproduction
of
France. The project marks a major step in Qatar's switch
from a
reliance on oil to gas for most of its revenues. The North
Field
is the world's largest natural gas field, and its
exploitation
will place Qatar in the top ranks of the world's gas
producers.
Natural gas from other fields provides fuel for power
generation
and raw materials for fertilizers, petrochemicals, and
steel
plants. With the expected depletion of oil reserves by
about
2023, planners hope natural gas from the North Field will
provide
a significant underpinning for the country's economic
development.
In the early 1970s, Qatar flared about 80 percent of
the 16.8
million cubic meters of natural gas produced daily in
association
with crude oil liftings. In that decade, the country made
progress in using its natural gas resources despite
several
setbacks. Whereas nearly 66 percent of onshore gas was
flared in
1974, by 1979 that proportion had fallen to less than 5
percent.
Two natural gas liquids (NGL) plants began operation in
Umm
Said in 1981. NGL-1 used gas produced from the Dukhan
field, and
NGL-2 processed gas associated with offshore fields. The
combined
daily capacities were 2,378 tons of propane, 1,840 tons of
butane, 1,480 tons of condensate, and 2,495 tons of
ethane-rich
gas. However, repeated difficulties prevented the plants
from
coming on-line as scheduled and operating at full
capacity. A
massive explosion at the precursor of NGL-1 in 1977 killed
six
people and caused US$500 million in damage. NGL-2 had
problems
with the pipelines that connected the plant with offshore
fields.
The sharp drop in oil production in the 1980s meant that
lack of
feedstock caused plant shutdowns and underproduction. As a
result,
downstream (see Glossary)
users suffered as well.
In 1982
the two plants produced 500,000 tons of propane and
butane--
slightly more than one-half of plant capacity. Condensate
production lagged even further at 138,000 tons, or 40
percent of
capacity.
This gloomy outlook is mitigated to some degree by hope
for
development of the massive natural gas reserves in the
North
Field. Discovered in 1972 by SCQ, its proven reserves of
4.6
million cubic meters (as of 1989) will be productive well
into
the twenty-first century. The Qatar Liquefied Gas Company
(Qatargas) was established in 1984 as a joint venture with
QGPC
and foreign partners to market and export liquefied
natural gas
(LNG) from the North Field.
Phase One of the US$1.3 billion project was officially
inaugurated on September 3, 1991. By the end of the month,
it was
pumping 23 million cubic meters of gas per day from
sixteen
wells. This is expected to meet an estimated 17 million
cubic
meters per day of domestic demand.
QGPC plans a massive development at Ras Laffan in
association
with the North Field project. In addition to a new port
with LNG,
petroleum products, and container loading berths, project
plans
include a 2,500-ton per year methanol plant and a
450,000-ton per
year petrochemical complex. The development is scheduled
for
completion in the late 1990s.
In line with its desire to diversify the firms engaged
in
developing its resources, Qatar signed a letter of intent
in
February 1991 with Chubu Electrical Power Company of Japan
to
supply 4 million tons per year of North Field gas for
twenty-five
years, starting in 1997. This amount represents two-thirds
of
Qatargas's expected capacity of about 6 million tons per
year.
Data as of January 1993
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