The Wall Street Journal: Qatar to Fund Development Spree With $110 Billion in Financing: "Qatar has already fostered a booming liquefied-natural-gas industry, benefiting from soaring global demand to draw in well-heeled investment partners like Royal Dutch Shell PLC": Saturday 24 September 2005
By CHIP CUMMINS
Qatar, a small but energy-rich Persian Gulf state, is offering up to $110 billion of project-financing opportunities to help fund a major development spree, including about $50 billion dedicated to oil and natural-gas projects.
Sheikh Mohammed bin Ahmed bin Jassim al-Thani, Qatar's economy and commerce minister, is expected to unveil the package at an International Monetary Fund and World Bank meeting in Washington Saturday. The spending frenzy comes as petrodollars swell state coffers of big oil and gas producers around the world, encouraging policy makers in places like Qatar to expand their energy industries and diversify their economies while times are good.
In addition to energy projects, Qatar has earmarked about $30 billion for new infrastructure developments and $15 billion in airport and tourism projects.
"This is going to fuel a tremendous amount of development in the country," said Stuart Pearce, chief executive of the Qatar Financial Centre Authority, a new body created to promote development opportunities.
Qatar is home to the world's third-largest deposit of gas -- behind Russia and Iran -- amounting to proven reserves of some 900 trillion cubic feet.
In an interview, Mr. Pearce didn't specify what new energy projects were on the drawing board. But he said most would likely be focused toward "downstream" opportunities, which typically involve customer-focused businesses like refining and gas and chemical processing.
Qatar has already fostered a booming liquefied-natural-gas industry, benefiting from soaring global demand to draw in well-heeled investment partners like Royal Dutch Shell PLC. LNG is a superchilled form of natural gas that can be shipped easily around the world in tankers. Shell said earlier this year it would jointly invest with the Qatar state oil company in a $6 billion to $7 billion LNG plant that will ship gas to Europe and the U.S. Regular gas has to move via pipelines.
The country has also drawn international energy companies like Exxon Mobil Corp. and Shell into massive investments in gas-to-liquids, or GTL, plants. GTL technology converts natural gas into liquids that can be used as an ultraclean fuel. The liquid fuel is easy to ship, but it is unclear whether a market in the new fuel will take firm hold.
New energy megaprojects like these, however, may be limited for the time being. Qatar's energy minister said in April that the country would postpone three early-stage GTL projects, partly because of the soaring construction and project-management backlogs that have accompanied today's high energy prices around the world.
Write to Chip Cummins at email@example.com
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