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Exxon to invest $16bn in Qatar over 5 years

08 Jun 2011

ExxonMobil’s investments in Qatar might exceed $16 billion over the next five years, compared to a world total of $37 billion, a senior company official has said.

This was revealed at a round table meeting held by the company to review world energy expectations until 2030. Saleh Bin Saad Al Mana, the vice-president of Government and Public Affairs at ExxonMobil Qatar, said the company will also invest some QR217 million ($59.58 million) in the Qatar Science and Technology Park by 2014, in a report in The Economic Times.

According to a report released on the same occasion, steady population growth in the world will lead to an increase in energy demand by 35 per cent in 2030, compared to 2005, Qatar’s official news agency said.

The report said the rising use of natural gas and other sources of low-intensity carbon supplies, besides energy conservation methods, will curb the environmental impact of the increase in energy demand.

The report expected a shift toward the use of natural gas, with governments and companies looking for reliable, cheaper and cleaner sources to meet energy needs.

By 2030, the world’s demand for electricity will increase by more than 30 per cent compared with 2005.

In the Middle East, demand for electricity in 2030 is expected to rise by more than 150 per cent from 2005 levels, the report said.

It also noted that the world’s demand for natural gas will increase by 70 per cent in 2030, compared to 2005.

Meanwhile, Qatargas has demonstrated a long-term commitment to meet Europe’s LNG needs, but has the flexibility to go to other markets if Europe doesn’t need the product, a Qatargas official said.

“There is not the slightest of doubt that Qatargas will remain a major supplier into Europe,” Andrew Dyke, Qatargas’ assistant director for LNG marketing Europe, said at the LNG Summit of the Flame 2011 conference in Amsterdam.

“However, if European market conditions are such that either gas supply is too abundant, or demand for gas and LNG does not require available supply, it is always possible that this LNG could go to other markets,” Dyke said in a statement.

Qatargas CEO Sheikh Khalid Al Thani said in March that Europe must increase the price it pays for spot LNG volumes or face having essential supplies redirected toward premium markets in Asia and Japan, which was already happening.

The company said that it had committed to supplying more than 60 additional LNG cargoes to customers in Japan in the next 12 months to help Japanese utilities meet power generation demand in the wake of the devastating earthquake and tsunami the previous month. The company said the volumes represent approximately 4 million mt of LNG.

Spot Asian LNG prices are currently well above $13/million British thermal units (mmBtu) versus Europe at less than $10/mmBtu, according to Platts data. Qatar is the world’s biggest producer and exporter of LNG with capacity of 77 million tonnes per year (mtpy), of which Qatargas accounts for 42 mtpy. Dyke said 45 per cent of Qatargas’ supply goes to Europe, but the company is able to switch destinations according to market conditions.