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Wed 8 Jul 2009 04:00 AM

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Power up

Companies look to Qatar for work as Gulf state's development continues.

Power up
Qatari Emir Sheikh Hamad bin Khalifa al-Thani arrives to speak at a natural gas conference.
Power up
Development in Qatar is driving demand for an increased supply of power and water, leading to a number of large utility projects.

Companies look to Qatar for work as Gulf state's development continues.

Thanks to its abundant natural gas reserves, Qatar's economy is still one of the fastest growing in the world. According to a report from Global Investment House, nominal GDP growth was a phenomenal 44% in 2008 and GDP per capita reached US $70,630.

Having made clear its intention to invest the receipts from gas sales, analysts predict real GDP growth of 13-18% in 2009. Growth is expected across the mineral and non-oil sectors and this, coupled with rapid population growth, is creating enormous demand for power and water in the country.

Demand for electricity grew 10% year on year in January and by 19% year-on-year in February. Consumption of water rose by an average of 20% year-on-year during the same period. Eisa Hilal Al Kuwari, director of the electricity network of Qatar General Electricity and Water Corporation (Kahramaa), attributed the rise to expansion of the distribution network. This has resulted in a dramatic fall in the number of people relying on water tankers and generators.

Growth and network expansion are all part of the hot-house economic environment that has made the cost of doing business high, with inflation in particular proving to be a burden for fresh start-ups. This burden is expected to reduce slightly, with predictions putting inflation at around 10% for 2009. While the utilities sector in Qatar is still developing, much of this is happening because of the country's ability to feed international utility operations with gas. The resulting industrialisation efforts in the country have generated significant contracts and continue to do so.

Several projects are underway to further boost water and power capacity. The Ras Girtas Company for Power project involves the construction of Ras Girtas independent water and power plant in Qatar. The plant capacity is 2 730 MW of electricity and 63 million gallons per day of potable water, and will be located in Ras Laffan. When the plant is operational it will almost double the electricity generation of the country according to reports in the media.

It is also expected to boost desalinated water production by around 33%. If the plant allows the country to exceed its generation needs it could lead to some of the first commercial power trades, if the inter-connection grid becomes a reality later this year. Construction of the plant began in May, when the founding stone was laid.

Small jobs count too…Service Connection for Existing Water Distribution Networks in Qatar

Tender Value: 4000 QAR (1099 USD)Improvement of Protection Systems in Qatar

Tender Value: 1000 QAR (275 USD)

Supply of Outdoor Switchgears in Qatar

Tender Value: 4000 QAR (1099 USD)

Refurbishing of Protection & Alarms at Primary Substations in Qatar

Tender Value: 1000 QAR (275 USD)

Ras Girtas Power Project

Type: IWPP

Client: Ras Girtas Co. for Power

Capacity: 2730 MW and 63 million gallons per day (MIGD)

Cost: $3.9 billion (est.)

Completion: 2012 (est.)

The Ras Girtas Company for Power project will see the construction of Ras Girtas power and water plant in Qatar. The plant capacity is 2 730 MW of electricity and 63 million gallons per day of potable water, and will be located in Ras Laffan. Mitsui Corporation of Japan was awarded the engineering, procurement and construction (EPC) contract which in turn sub-contracted Hyundai Engineering and Construction Company of Korea, Mitsubishi Heavy Industry of Japan and Sidem of France.

The first phase of the project is expected to be completed in 2010; meanwhile the project will be completed in April 2011. Ras Girtas Co. for Power is a joint venture between Qatar Petroleum (15%), Qatar Electricity and Water Company (45%), GDF Suez of France (20%), Mitsui Corporation of Japan (10%), Chubu Corporation of Japan (5%) and Shikoku Corporation of Japan (5%).

The Mesaieed Project will see the construction of a 2 000 MW power plant and a large substation, the output of which will serve the Qatar national grid and the proposed Mesaieed aluminium smelter.

GE was awarded the contract for installation six Frame 9FA gas turbines, two Frame 6B gas turbines, six 330H type generators, and three D11 steam turbines. Iberdrola Ingenieria Y Construction was awarded the engineering, procurement and construction (EPC) contract in November 2006. Completion is scheduled for 2010 and the projected project budget is US $2.4 billion.

Major transmission and distribution projects are also in various phases of completion, including cables crossing the capital city's bay. Around 78 km of water distribution mains are currently being upgraded in different areas in Doha, in diameters ranging from 100 to 600 mm. The project is due for completion in May 2010.

Construction of seven new reservoirs, each with six MIGD of capacity, is underway in Muaither water station, in addition to a pump station with eight pumps and approximately 6km of 900 mm pipelines. The project is due for completion in March 2011.

At Mesamir water station, construction of four new reservoirs, each with nine MIGD of capacity, is underway, in addition to one pump station with eight pumps and 21 km of 600-900 mm pipelines. The project is due for completion in February 2011.

As well as investing in conventional power generation, Qatar is also embracing renewable energy. Qatar Foundation, a non-profit organisation, has unveiled its plans for a $500 million solar cell plant to produce the polysilicon required for solar cells.

The country's interest in research and development, as well as industrial growth, is reflected in three key developments: Qatar Science and Technology Park, Ras Lafan Industrial City and Energy City Qatar.

With a focus on the upstream energy sector gas and infrastructure spending will remain the primary areas of investment for the short- and medium-term future. The added bonus for Qatar is that this continued spending is driving the non-oil economy along with it, allowing Qatar to outstrip its regional peers in 2009.

"The growth in the hydrocarbon sector outpaced other sectors in 2008, bucking a two-year trend of stronger non-hydrocarbon growth," said Waji Boustany, assistant economist at National Bank of Kuwait. "The gas sector doubled in size in 2008, partly on higher energy prices, but also on the continued increase in output volumes."

This dependence is a cause for concern within the economy and although there are diversification efforts under way, they are in their infancy and rely on energy revenues to drive their development. Unlike some of its neighbours, Qatar's property market continues to grow, driven by genuine end user demand. While this factor remains in play the outlook for utility demand and the associated contracts it generates will continue to be positive.

Qatar Solar Power PlantType: Solar Cell Manufacturing Plant and Solar Power Plant

Client: Qatar Foundation

Capacity: 100 MW (initial)

Cost: $500 million (solar cell plant)

Completion: 2013 (est.)

Qatar Foundation, the private non-profit organisation, recently unveiled its plans for a $500 million solar cell plant to produce the polysilican required for solar cells. The cells manufactured at the plant will then be used to build a 100 MW solar power plant in Qatar Science and Technology Park (QSTP) within the next five years.

The project will take only two years and the hi-tech modular plant is to be built in Europe by a leading manufacturer, then put together in Qatar on site. QSTP will also encourage its tenants Tata, Chevron, Shell, and Total, which are major players in solar, to collaborate with Qatari companies emerging in the sector.

Mesaieed Independent Power Plant

Type: IPP

Client: Mesaieed

Capacity: 2000 MW

Cost: $2.4 billion

Completion: 2010

The Mesaieed Project will see the construction of a 2000 MW power plant and a large substation, the output of which will serve the Qatar national grid and the proposed Mesaieed aluminium smelter. GE was awarded the contract of installation six Frame 9FA gas turbines, two Frame 6B gas turbines, six 330H type generators, and three D11 steam turbines.

Iberdrola Ingenieria Y Construction was awarded the engineering, procurement and construction (EPC) contract in November 2006. The project is expected to be completed by Q2 2010, and Qatar Petroleum will supply gas for the plant.

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