Qatar in profile: The 2011 upstream energy report

In 1973, oil production and revenues increased sizably, moving Qatar out of the rank of the world’s poorest countries and providing it with one of the highest per capita incomes.

In 2007, Qatar’s per capita income of nearly $67 000 was the fifth-highest in the world. According to the 2009 OPEC Annual Statistical Bulletin, Qatar’s average oil production stood at around 733 000 barrels per day (bpd).

This is down significantly from 2007, when crude production was around 835 000 bpd, and was expected to reach 1.1 million bpd by 2009. At the current production pace, oil reserves are expected to last more than 40 years.

Moreover, Qatar’s proven reserves of gas are the third-largest in the world, exceeding 900 trillion cubic feet (14% of the world’s total proven gas reserves).

Qatar shares with Iran the largest single non-associated gas field in the world, the North Field. Qatar is the world’s largest producer of liquefied natural gas (LNG), passing a production capacity of more than 31 million tonnes per annum (mmta) back in 2007.

By 2010, Qatar had reached 77.5 mmta of LNG exports, accounting for one-third of the world’s LNG supply. The 1991 completion of the $1.5-billion Phase I of the North Field gas development project transformed the economy. In 1996, Qatar began exporting liquefied natural gas to Japan.

Further phases of North Field gas development costing billions of dollars are in various stages of planning and development, and Qatar has concluded agreements with the UAE to export gas via pipelines and to Spain, Turkey, Italy, the U.S., France, South Korea, India, China, Taiwan, and the UK via ship.

However, the government halted any further expansion of gas production until 2010, as it assessed its plans for future exploitation of the field.

Qatar’s natural gas liquefaction facilities and related industries are in Ras Laffan Industrial City, site of the world’s largest LNG exports of more than 31 million metric tons per year.

Qatar’s heavy industrial base, located in Messaieed, includes a refinery with a 140 000 bpd capacity, a fertilizer plant for urea and ammonia, a steel plant, and a petrochemical plant, and several new petrochemical plants will be built in the coming years. All these industries use gas for fuel.

Qatar’s Ras Laffan Industrial City (RLIC) is estimated to have made US$70 billion in investments to date according to its director.

Abdul Aziz Jassim Al Muftah says that the city is still pursuing its planning and development programme in infrastructure of its existing industries, future hydrocarbon industries associated with LNG and support industries.

Al Muftah says that a number of major projects were slated for implementation this year, including a solar technology project to produce polysilicon and the Barzan gas company for supplying gas mostly to the domestic market, and feeding the industrial and desalination requirements.

“I am proud of the important role played by Ras Laffan Industrial City and in the accomplishment of our LNG’s industry target capacity of 77 million tonnes per annum, which is seen as a great achievement last year,” he explains.

RLIC continues to expand further with Qatar Petroleum maintaining oversight over its growth, said the director.

In an updated plan for the major industrial zone, Al Muftah said that it would be expanded to cover a total area of 295 square kilometres which more than doubles its current size, helping it meet and secure the needs of Qatar’s growing hydrocarbons industry over the next 30 years.

Steps are being taken to establish Ras Laffan’s Emergency and Safety Training College in the western part of RLIC, Al Muftah says, adding that it would be a world class educational institution in terms of size, facilities and the content of its courses.

He reveals that there will be extensive work on building Qatari ships, adding that Nakilat, Qatar’s main LNG vessel operator has signed a partnership with the Dutch shipbuilder, Damen to create a new company called Nakilat Damen Shipyards Qatar (NQSD) to build both commercial and private vessels.

Maritime matters
N-KOM’s (Nakilat-Keppel Offshore Marine) new state-of-the-art dry dock at Ras Laffan Port received its first ship – the RasGas’ chartered LNG Vessel, Simaisma in April.

“This is an important milestone for RasGas, our shipping operations and the country, placing Qatar at the forefront of not only regional, but global port development and the shipping industry,” says Tom Mc Hale, RasGas’ acting managing director.

RasGas’ chartered LNG fleet is an integral part of the company’s LNG supply chain and strategically, one of the most important links to ensure reliable delivery of LNG to RasGas’ global customers. These LNG ships are specifically designed to handle the low temperature of LNG, as the safe transportation of the liquefied gas is essential.

The RasGas fleet contains Conventional, Q-Flex and Q-Max Vessels that are double-hulled to provide a double barrier for cargo protection, making RasGas’ LNG Vessels some of the safest and most advanced on the seas.

To ensure the highest standards in safety, the RasGas fleet of 27 vessels demands regular maintenance and has, until recently, required periodic dry docking abroad as Qatar did not have the necessary facilities.

The completion of N-KOM’s new facility in Ras Laffan Port reduces the need for docking in foreign ports for maintenance and repair – further underlining RasGas’ position as a secure and reliable supplier of LNG with a sustainable model that ensures the integrity of their supply chain.

“RasGas aims to provide fast, secure and cost-efficient shipping solutions to its clients. The new dry dock at N-KOM facilitates this and is another first for Qatar” added Mc Hale.

N-KOM Dry Dock was completed in the fourth quarter of 2010 and the docking of RasGas’ Simaisma represents the first in a number of phases that will see this dry docking facility grow into one of the largest in the world, providing maintenance and repair services for vessels in various industries as well as ship building facilities.

Well Serviced
Established in 2008, Al-Shaheen Well Services Company (ASWSC) is a Qatari joint venture between Al-Shaheen Energy Services (ASES) and Weatherford Holding, a subsidiary of Weatherford International, one of the world’s largest oilfield service and equipment companies.

The company has recently invested heavily in its own in-house training centre, and David Green, Al-Shaheen Weatherford Simulator Center Manger, expects strong demand from a resurgent hydrocarbon marketplace.

“The Al Shaheen – Weatherford joint venture is committed to provide training to the local oil and gas industry and as a part of this endeavor we are currently having a soft opening of one of the most advanced simulator centers in the industry which is based in Dukhan in the State of Qatar,” he says Green tells Oil & Gas Middle East that 2011 will be geared around enhancing the IWCF well control training the company already has in the region, leading into Coil Tubing simulation training.

“By year’s end it is expected that the Al Shaheen – Weatherford Dukhan simulator centre will be fully operational in addition to an e-learning training centre that is due to open for training by Q3 in our new offices in Doha.”

Most of the students at the centre will be from the domestic oil and gas sector in Qatar, although Green says that once the full spectrum of courses is available he expects clients from other parts of the
Middle East, especially where the training offered by Al Shaheen Weatherford is not available locally.

Exciting developments, which will be firsts for the Qatari market, are well underway, he says.

“We are installing a simulator that will capture both a Rig Floor and Cyber Chair Drilling operating environment. The simulators have state of the art simulation, large HD graphic walls and the industry’s first graphic wall supported by sound enhancement, which will ensure a real as possible rig operation operating environment for the student,” explains Green.

The cutting-edge centre will also incorporate a fully developed Coil Tubing Unit (CTU) simulator with realistic controls,3D surface graphics, a broad choice of coil size and a comprehensive BHA tool suite allows almost any type of coil tubing operation to be re-created.

“This provides a broad spectrum opportunity to not only train, but also to asses and manage risk associated with CTU operations,” he adds.

The simulator center will also be equipped with a production and workover simulator that has work-over rig controls, 3D surface graphics, a surface choke manifold and Y-Block tree hardware coupled with a powerful well modeling software allowing a large range of production and work-over activities to be explored.

“Ultimately we are putting in to Qatar training technology that is currently not available in the country so previously people have had to travel abroad in order to complete most of the training courses that we will be offering in the local market.”

Al-Shaheen – Weatherford is currently installing technologies that will take it forward for the next two to three years, but Green emphasizes that the needs of its customers come first.

“Based on the technology we have in Qatar, we fully expect our customers to be talking to us about enhancements to what we have and possible new technologies that are currently not available, but could be developed.”

Weatherford is currently working on downhole tool technology simulations and it is expected that the first package of this program to rolled out before year’s end.

The technology is being touted as a potential game changer in the way upstream producers will plan, execute and evaluate jobs in future for certain equipment systems run into the well.

“With the market starting to show the sign of recovery and as our customers demand starts to increase, we are ready and positioned to expand our product lines offering,” explains Anas Aljajeh, Al-Shaheen Well Services Company General Manger.

“We are working on many opportunities which we will be announcing in the near future. We are committed to provide our customers with new and innovated services and products that helps them optimize their performance.”

In the service sector which Al-Shaheen Weatherford plays the business climate is dependent on three elements, explains Aljajeh, customer demand, having the right tools and competent staff and the quality of service the company can provide.

“With the global energy demand increasing we are optimistic that the service sector will start to see the benefit by the 4th Quarter of 2011,” he adds.

Gas To Liquids
Mark Carne, executive vice president and country chairman for Shell in Dubai and Northern Emirates says Shell’s operations in Qatar are breaking new ground, and that the country is at the centre of a global GTL awakening.

Gas, Carne notes, is absolutely fundamental to the way the Middle Eastern energy business is going to be run in the coming decades, accounting for much of the project investment and exciting developments right around the region, and naturally Qatar is central to that development.

“If you look at the Middle East gas demand, it is going to grow by at least 75% in the next 20 years. That will make it a larger gas market than Europe’s – really a huge gas market.”

Today the region is witnessing a huge amount of gas development growth, driven by economic development and the need to move away from burning fuel oil in electricity generation and towards natural gas.

The gas game is an area Carne is particularly excited about. A huge proportion of the world’s gas is in the Qatar, but Carne says the company can play an even more exciting role than linking producers to customers by adding value to the resources regionally available.

“Qatar’s gas to liquids project (GTL) is a great example of taking gas and then adding value, by converting it into higher value liquid products.”

Pearl GTL will come online this year, generating 140 000 barrels of oil equivalent (boe) products a day, and another 120 000 boe of natural gas liquids and ethane each day. Pearl GTL will generate an incredible three billion boe of natural gas over the life of the project.

Wider Economy
On the back of its giant energy projects, the country’s economic growth has been stunning. Qatar’s nominal GDP, estimated to be $128 billion for 2010, has recently been growing at an average of 15%, and the 2010 growth rate is estimated to be 19%.

Qatar’s 2007 per capita GDP was $67 000, and projected to soon be the highest in the world. The Qatari Government’s strategy is to use its wealth to diversify the economic base beyond hydrocarbons.

As if it needed it, the domestic economy received a further confidence boost in late 2010, when it won the rights to host the 2022 FIFA World Cup.

Ambitious and futuristic stadia designs have been wowing the world’s football fans since the surprise decision to host the tournament in the Middle East, in summer, was announced. The world expects. Qatar can probably deliver.

Shell in Qatar
Pearl Gas to Liquids (GTL) is the largest project ever launched in Qatar, and quite possiblty one of the largest energy projects ever undertaken world-wide.

It will be the world’s largest GTL plant and will cement Qatar’s place as the GTL capital of the world. The Qatargas 4 LNG project is being developed by Qatargas on behalf of shareholders QP and Shell (30 per cent).

The project combines Shell’s global leadership amongst private energy companies in LNG with Qatar’s vision to become the world’s largest LNG supplier. Shell has established a world-class research and development facility and a learning centre at the Qatar Science & Technology Park.

Called Qatar Shell Research & Technology Centre, the company is committed to investing up to $100 million on programmes there over 10 years.

Shell has been appointed by Qatar Gas Transport Company (known as Nakilat) as shipping and maritime services provider for one of the most significant fleets in the global LNG business.

A key element of the agreement is the commitment to develop Nakilat’s own shipping expertise.

Oxy in Qatar
Oxy has been an active investor in the Middle East and North Africa for more than four decades, with significant growth in the last 10 years. We are well regarded in this key region for our strong performance record, technical expertise and effective working relationships with strategic partners.

More than a third of Oxy’s worldwide oil and gas production comes from the Middle East/North Africa. Our net developed and undeveloped oil and gas assets in the region total more than 17 million acres.

Oxy is the second-largest oil producer offshore Qatar, participating in three projects: Idd El Shargi North Dome (ISND), located approximately 50 miles east of the Qatar peninsula; Idd El Shargi South Dome (ISSD), about 15 miles south of ISND; and Al Rayyan, located northeast of the Qatar peninsula. For nearly two decades, Oxy has worked in close cooperation with Qatar Petroleum to develop and operate offshore oilfields.

Oxy is also a partner in the giant Dolphin Project, the premier transborder natural gas project in the Middle East.

One of the region’s largest energy initiatives, Dolphin supplies natural gas — produced from wells offshore Qatar, processed at Ras Laffan and transported through a 230-mile-long subsea export pipeline — to markets in the United Arab Emirates and Oman.

Total in Qatar
Total has been present since 1936 and holds interests in the Al Khalij field (100%), the NFB Block (20%) in the North Field, the Qatargas 1 liquefaction plant (10%), the Dolphin project (24.5%) and train 5 of Qatargas 2 (16.7%).

The Group’s production was 141 kboe/d in 2009, compared to 121 kboe/d in 2008 and 74 kboe/d in 2007. Production substantially increased with the start-ups of Qatargas 2 and Dolphin.

Production from Dolphin started during the summer of 2007 and reached its full capacity in the first quarter of 2008. The contract, signed in December 2001 with state-owned Qatar Petroleum, provides for the sale of 2,000 Mcf/d of gas from the North Field for a 25-year period.

The gas is processed in the Dolphin plant in Ras Lafan and exported to the United Arab Emirates through a 360 km gas pipeline. Production from train 5 of Qatargas 2 reached its full capacity (7.8 Mt/y) in late 2009.

In addition, Total began to off-take part of the LNG produced in compliance with the contracts signed in July 2006, which provide for the purchase of 5.2 Mt/y of LNG from Qatargas 2. The Group also holds a 10% interest in Laffan Refinery, a 146 kb/d condensate splitter that started up in September 2009.

Offshore Safety – Qatar Focus
More than ever before, operators and service companies alike must come up with new ways of working to improve operational efficiency and reduce costs.

Personnel transfer is one such area that has come under scrutiny. More than 10 million crew transfers take place annually across the world in the offshore oil and gas sector, either by helicopter, vessel or crane and basket, making this one of the highest risk and highest cost activities in the industry.

Recognising all of these factors, Offshore Solutions, based in IJmuiden, the Netherlands, has developed its Offshore Access System (OAS).

Conceived in 2003, the OAS is a 21metre hydraulically operated telescopic gangway that is fitted with an active heave-compensation system. It incorporates a motion reference unit in its active hydraulic system which, when engaged, maintains the walkway tip at a constant height relative to the horizon.

This allows the gangway to safely connect to a fixed offshore structure in sea states of up to 2.5metre significant wave height (equivalent to a maximum wave height of 4.8metres) when installed on a suitable vessel.

Offshore Solutions has achieved more than 6000 operational connections, transferring in excess of 70 000 personnel with zero incidents or accidents.

Most recently, the OAS commenced operations in Qatar for Qatar Shell GTL, operator of the world’s largest gas to liquids plant.

The OAS is installed on the Bourbon Gulf Star, a DP2, IBC Type 2 platform supply vessel that is used to transfer personnel to and from Shell’s two wellhead platforms to execute operations and maintenance work. The OAS will remain connected when personnel are onboard the platforms.

The contract was awarded based on the OAS’ proven technology, safety record and the potential to increase operational efficiency.