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Interview

Hamad Rashid Al-Mohannadi, CEO, RasGas, Qatar

28.07.2014 / Energyboardroom

The CEO of RasGas offers his perspectives on current risks in the global LNG market, how LNG will contribute to the development of Qatar, and the challenges of balancing domestic gas supply and export.

 

What would you identify as the largest risks in ensuring regular and timely supply of LNG to global markets today, and what steps as a company can you take to mitigate them?

The greatest risks to ensuring timely supply of new LNG to meet growing global demand are the delay in development of new supply and the associated LNG value chain; escalating development costs and indecision or inability of customers and suppliers to agree mutually on acceptable contract terms.

Qatar has been successful on a large scale, developing the full LNG value chain from production to customers and markets. Reliability and Flexibility will become increasingly important to customers as the market becomes more dynamic.

Qatar’s strategic location is a major advantage as it means that it can be flexible between west and east in an economic manner.  We are proud of the fact that we always delivered to our customers on time, every time. It is this reliability that is embedded in RasGas’ core values. And I believe that those who can best balance the customer need for flexibility while ensuring supply security will be most successful.

On the acceptable contract terms front, RasGas is proactively working closely with its existing and new potential customers for incremental long term supply from its 37 Mtpa of production capacity.  

The realization of Qatar’s National Vision 2030 is reliant on continued strong support from LNG sales. What are your objectives as a company in order to continue to provide this support for Qatar’s growth?

The State of Qatar has grown at a historic pace in the last two decades and natural gas has rapidly become the clean energy of choice that powers and transforms global economies.  At RasGas, we aim to actively and positively contribute towards and enable the sustainable development of Qatar and its people in alignment with the Qatar National Vision (QNV) 2030.

As RasGas continues to make good progress on major construction projects like the Barzan Gas Project, it has maintained the highest standards of safety and health, as well as expanded its contribution to Qatar’s sustainable development.

RasGas’ economic contribution to the State of Qatar is extensive and benefits many stakeholders, as well as supporting the ‘economic development’ pillar of the Qatar National Vision 2030. In addition to the portfolio of energy products that RasGas supplies, this positive impact is made through the revenues the company generates for its shareholders, the payments it makes to government, the capital investments it makes in the State of Qatar, the jobs and financial compensation it provides for employees, and the support the company provides to the local economy by engaging local suppliers and contractors.

Business-education partnerships, developed through mentoring and skills transfer programmes expose students to quality learning and real-life experiences, support building a stronger education system and a more competitive workforce for the future.

RasGas has the ability and commercial flexibility to respond quickly to the dynamics of market requirements – a key competitive advantage in an increasingly competitive world. Consequently, our strategy will be to ensure that RasGas remains focused upon executing and implementing its short and long term LNG sales commitments in a safe and reliable manner, while optimizing its business, for the benefit of our customers, shareholders and the State of Qatar.

What are the challenges in balancing strong export sales figures with growing gas demand at home, as Qatar begins to develop its downstream sector? How is RasGas working with the rest of the sector to ensure supply will be adequate?

Today, Qatar is producing approximately 77 million tonnes of LNG per year and is the world’s largest LNG exporter. RasGas produces approximately 37 million tonnes per year of LNG from 7 trains of production and operates an additional 2 trains on behalf of AKG (Al Khaleej Gas) for domestic gas requirements.

Looking forward, the Barzan Gas Project when finished will help fuel Qatar’s future development and secure Qatar’s growing energy requirement and domestic needs, providing an incremental 1.4 billion standard cubic feet per day (bscf/d) of dry gas, as well as associated products. Barzan, combined with existing production will raise overall output to 11bscf/d (amounting to 2 million barrels of oil equivalent per day) ranking RasGas amongst the largest gas producers in the world.

When completed and fully operational, a major portion of the Barzan Gas will be used by the power and water generation sectors providing clean, natural gas to support several of Qatar’s new projects that are underway, ranging from the new cities development, Hamad International Airport to the 2022 World Cup infrastructure projects. On the Barzan project, we are approaching 90% completion of the onshore construction and are very proud to be progressing safely, efficiently.

By the same token, RasGas currently supplies close to 30 percent of the world’s total helium production.

In what other ways will RasGas be looking to help Qatar reach its objectives of improving its downstream and petrochemical sector in the years to come? What will your professional experience in the downstream segment bring in this regard?

As Qatar develops its downstream industry, RasGas is responding and playing a pivotal role in operating its plants and major expansion projects to meet the growing demands. Some examples of RasGas’ major contributions are:

  • AKG I provides gas feed stock to Oryx GTL which then produces final products
  • AKG I & II supply gas feedstock to Qatar Petroleum who then supplies Power stations and many gas consumers in Mesaieed
  • AKG I, II, RL(II) and, in future, the Barzan Gas Project, supply condensates to Laffan Refinery 1 and in future, Laffan Refinery 2
  • AKG I and II supply Ethane to RLOC and, via QP, Qapco

Early next year, once the Barzan Gas Project is commissioned, RasGas will supply future downstream projects with:

  • RL, RL(II), RL3 and AKG will supply Propane to Al-Karaana
  • RL, RL(II), RL3 and AKG will supply Butane to Al-Sejeel

Qatar is bringing management of its LNG fleet home, with Nakilat taking over owner-operator responsibility for four vessels earlier this month. What changes and improvements will this bring to the efficiency of RasGas’ LNG fleet? Are there plans to bring the management of more LNG tankers back to Qatari companies?

RasGas is now in possession of the most flexible LNG shipping fleet in the world. Our diverse fleet of 27 long-term chartered vessels, with a Q-Max vessel and a variety of conventional and Q-Flex vessels are utilised for the safe and reliable delivery of Qatar LNG to markets around the world.

Nakilat is one of the largest LNG ship owners who support safe, reliable and environmentally friendly transportation services of RasGas and other LNG producers. They own the RasGas chartered Q-Max, and through JV partners own RasGas chartered Q-Flex and eight conventional vessels. At present, Nakilat contracts industry leading vessel management services to operate RasGas’ long-term chartered fleet.

Nakilat’s recent foray into full vessel management and operations of LNG vessels provides a progressive outlook to the industry in Qatar. RasGas is thankful for the strong business relationships with Nakilat, and will continue to identify synergies and look forward to extending our relationships even further.

 

To read more interviews and articles from Qatar, and to download EnergyBoardroom’s latest free report on the country, click here.

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