Posted on June 13, 2011

Qatargas Chief Executive Officer HE Sheikh Khalid Bin Khalifa Al Thani, Chief Executive Officer expects a higher demand for Liquefied Natural Gas (LNG) natural gas with many countries considering reducing the use of nuclear energy in the light of the Japan nuclear crisis following the Fukushima Daiichi power plant destruction in earthquake that struck the country on March 11.

Speaking to Qatar News Agency (QNA) in an exclusive interview, Sheikh Khalid alluded to the discussions with Japan that would elaborate conditions for a number of long-term contracts to increase of LNG exports to Japan. Qatargas has committed to supply for one year (from April, 16 2011) additional LNG volumes equivalent to 60 plus conventional LNG cargo to Japan, demonstrating the company's commitment to support long-term Japanese customers, he said.

Qatargas supplies a total of 6 million metric tons per annum (mtpa) of LNG from Qatargas 1 to Japan under long term contracts. The first shipment of LNG was delivered to Japan in 1997.

On the possibility of exporting of additional 3 million metric tons of LNG to Japan, Sheikh Khalid said such decision could be determined by the Japanese government''s policy during the next phase in terms of increasing or decreasing the country''s reliance on nuclear energy. Qatargas would increase LNG shipments to Dubai, UAE he said, The first the first cargo was despatched in December 2006 through a Q-Flex vessel with LNG produced from Qatargas 2. In 2008 Qatargas, Shell and Dubai Supply Authority (DUSUP) signed a series of agreements under which LNG would be supplied to DUSUP primarily from Qatargas 4 from 2011.

On the role of receiving terminals in propelling Qatar as a top LNG producer, Sheikh Khalid said, "Qatargas has invested in long term capacity creation through the construction of large mega-trains and ships to transport our LNG efficiently; building of terminal capacity in different markets such as the UK (South Hook) and US (Golden Pass). This creates flexibility and capacity in these markets. By securing access to the liquid gas markets of the US and the UK, Qatar was able to rapidly expand its LNG production.

"Since our contracts into these markets have diversion rights we are able to capture new market opportunities as they appear rather than most projects which seek to do this only prior to their Final Investment Decision. Our terminals in the UK and US provide us with tremendous optionality and will continue to do so for many years into the future. Furthermore, these terminals will also facilitate increased deliveries of LNG to the UK and US as and when the market requires it." At present Qatargas does not have plans for any new receiving terminal. The responsibility for future investments in overseas energy related infrastructure lies with Qatar Petroleum International (QPI), he said.

On matching global environment standards, Sheikh Khalid said, "Qatargas is focused on reducing our emissions to the lowest levels possible to meet or beat the international standards. For example reduction in emissions from Q-Max/Q-Flex vessels (cutting the carbon costs of moving each molecule of LNG) compared to conventional LNG vessels, jetty boil off, flaring reduction by 98%, sulfur reduction programmes on our existing facilities, Laffan Refinery has zero flaring in line with EU regulations; waste gas from QG2 start-up is recycled in QG1 operation.

"Qatargas is currently undertaking the Jetty Boil-Off Gas Recovery Project, (JBOG) which will minimise LNG boil-off gas flaring at LNG berths by making productive use of the gas that boils off during loading of LNG carriers at the Ras Laffan Port. "Besides, the existing Qatargas 1 operations we have recently completed a suite of significant NOx (Nitrogen Oxides) reduction projects, with direct benefits to air quality in the region and the new mega-trains have been designed with highly sophisticated NOx mitigation equipment, which easily meet the new strict Ministry of Environment NOx emission limits. "The mega-train design and operating philosophy allows for substantial reduction in CO2 emissions per ton of LNG produced versus conventional LNG train technology. Qatargas also has an established track record in dealing with mitigating and offsetting environmental effects of its projects, such as the QG2 and QG3&4 coral translocation and other biodiversity initiatives which we have developed or are proactively involved with on a voluntary basis.

"Qatargas is concerned with promoting environmental education and awareness and as part of its corporate citizenship initiatives and we are actively involved with local schools and environmental organisations to promote the message of environmental protection and management and we acknowledge and develop the role that responsible industry should play in this." Qatar is proactive on sustainable development and environment concerns. It is one of the pillars of Qatar National Vision 2030. Pursuing this initiative Qatar had suggested to the World Trade Organisation on exempting gas and its byproducts from customs duties. Other Gulf states, too, are pushing for this. Commenting on this Sheikh Khalid said, "As the world''s largest LNG producer Qatar supports this wholeheartedly. From a Qatargas perspective, I feel the WTO should pay attention to this initiative given the significant environment value it possesses and the impact it will have on reducing our carbon footprint."

Asked about the importance of Qatar hosting the World Gas Conference (WGC) in 2018, the Qatargas CEO said, "The significance for us is that this event has never been held in the Middle East. One of the features of the conference is to provide a post-conference technical tour. We can provide the delegates a visit to the largest LNG facilities in the world. "It would be a great privilege to host this event and offer our delegates not only a great technical and commercial programme but our Qatari hospitality as well. We have taken steps to set up an internal WGC bid committee comprising our marketing and public relations staff. This committee is working towards the required activities associated with the bid."

Being a member of the IGU was he optimistic on chairing the body from 2015 to 2018? Sheikh Khalid said, "This is the first time in the 80-year history of the IGU that there are four bidding countries. Thus the competition is very stiff. We have initiated a campaign to secure support from the IGU members to vote for us in this bid process. "We will continue with our campaign through October when the IGU council will meet to vote for the winning bid. Thus we remain optimistic due to the work which we are currently undertaking to secure support from the IGU members.

In March this year Qatargas received the Green Award for its LNG Carriers at the 25th GASTECH Conference & Exhibition in Amsterdam, one of the premier platforms in the global gas calendar. This is a global recognition to Qatargas LNG Carriers in promoting safe and environmentally responsible shipping, he said, saying that Qatargas charters from Qatar Gas Transport Company Ltd 13 Q-Max, 19Q-felx LNG Carrier in addition to 18 other LNG Carriers. The establishment of any new overseas LNG terminal project requires a pre-feasibility studies for investment led by Qatar Petroleum International (QPI), he said.

Responding a question on the degree of Qatargas's support for Gas Exporting Countries Forum (GECF) as a gathering of the world''s leading gas producers in elaborating a mechanism for gas pricing, HE Sheikh Khalid bin Khalifa Al Thani said the Qatari government can only judge the advantages of such a decision. In conclusion Sheikh Khalid reaffirmed Qatar's position in support of a fair treatment for natural gas in energy policy of international markets aimed at establishing a balance with oil market.