Posted on October 21, 2013

As one of the world’s largest consumers of water and electricity on a per capita basis, Qatar is looking to reduce its utilities usage, according to an Oxford Business Group (OBG) report.

OBG also noted that with demand for water likely to outstrip supply in the near future, the government is taking steps to boost capacity. OBG said; “In a statement issued on September 6, state utilities distributor Qatar General Electricity and Water Corporation (Kahramaa) said efforts to lower power consumption were beginning to show results, with per capita usage down by 10.5 percent for the first half of 2013 compared to the same period last year.” Kahramaa has targeted a 20 percent and 35 percent reduction in electricity and water usage, respectively, by 2018.  Qatar currently has three independent water and power projects (IWPPs), one independent power project and one power plant owned by Qatar Electricity and Water Company (QEWC).

Successful IWPP

OBG quoted Ras Girtas CEO Faisal Obaid Al Siddiqi as saying the IWPP model has worked well in Qatar. “Typically electricity and water utilities are either publicly or privately owned, both of which can be problematic. By working with the private sector, Qatar has been able to increase plant efficiency and lower costs,” he said. Ras Girtas is the largest IWPP in the country.

Electricity generation capacity stands at 8,756 MW, while 325 million gallons per day (mgpd) of water can be produced. This is more than enough electricity to meet the needs of Qatar, where peak demand averages around 6,000 MW. However, according to industry participants, water usage looks set to exceed supply next year, said OBG.

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Projects in the pipeline

OBG said several projects that would boost water supply are in the works. “The Ras Abu Fontas A2 desalination plant, which is being built by Mitsubishi and Toyo Thai Corp., is scheduled to be completed by June 2015 and will be able to produce 36 mgpd. The so-called Facility D, an IWPP to be located between Wakrah and Mesaieed, is expected to be tendered by 2015 and will have a generation capacity of 2,000 MW and 60 mgpd. A desalination plant is being considered for Ras Laffan, with a proposed capacity of 90 mgpd, although this facility would generate water for industrial use only. Pre-qualifications have been awarded for both the Ras Laffan water project and the Facility D IWPP,” said OBG.

Overseas expansion

Market participants are also looking to expand overseas, to take advantage of rising demand for utilities internationally and to earn returns on Qatar’s substantial hydrocarbons profits, observed OBG. “In May, QEWC, Qatar Petroleum International (QPI) and Qatar Holding signed an agreement to establish Nebras Power, with an eye toward investing in water and electricity IPP projects abroad. The entity, which will be 60 percent held by QEWC, with 20 percent shares each owned by QPI and Qatar Holding, will focus primarily on opportunities in the Middle East, Asia and North Africa,” said OBG.

OBG quoted QPI CEO Nasser Al Jaidah as saying: “The strategy behind the formation of Nebras is to have a singular Qatari front to deal with global power and water investments, with full alignment of its stakeholders.” In July this year, QPI had announced that it was separately investing in a Greek utility, acquiring a 25 percent holding in Greece’s Heron II power plant. Al Jaidah told OBG that this acquisition process had been underway for more than a year before the Nebras agreement was signed and added that QPI may divest its stake in the Greek facility to Nebras in the future.

source: bqDoha

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