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Interview

Manuel Binoist, CEO, Gasal, Qatar

22.06.2014 / Energyboardroom

The CEO of the Gasal discusses how successful the joint venture between Air Liquide, Qatar Petroleum and QIMCO has been since it was established in 2006, and what the company still has left to achieve. 

You were appointed CEO of Gasal one year ago. What have you achieved in that year?

Eight years ago, there was no world-class gas industry in Qatar. There was a clear need from Qatar to bring in international players to come and support the development of the industry. Gasal was established in 2006 as a joint venture between Air Liquide, Al Waseeta (Qatar Petroleum) and QIMCO (Qatar Industrial Manufacturing Co.), dedicated to the manufacture and distribution of industrial gases such as oxygen, nitrogen, hydrogen and argon to the steel, oil, gas and chemical downstream industries in Qatar.

When Gasal’s shareholders established the company, they saw that larger centralized facilities operated by an expert and connected to a network of industrial gas pipelines was more effective than producing industrial gases at scattered on-site units or delivering it by trucks in liquid form. Process safety, high reliability and energy efficiency were the drivers and motivation for the joint venture. The production of industrial gases is a capital and energy-intensive process. Having larger centralized production units brings production costs down thanks to economies of scale and scope, higher efficiency and better utilization.

Since our establishment, we have moved from being a project company to a fully-fledged operating entity with well-developed synergies established between the different users of our products, which are supplied either by pipeline or by bulk liquid trailers.

Our vision and objectives have always been very clear. We are here to support the development of the energy industry through dedication and know-how, notably in Ras Laffan and Mesaieed.

Up until today, we have been able to achieve all of our initial targets. For instance, we have recently extended our distribution pipeline network in Ras Laffan by 30km. We completed the construction of a hydrogen  manufacturing facility, again in Ras Laffan, that will deliver high purity gases to Qatar Solar Technologies (QSTech) solar grade polysilicon plant. Moreover, last year we started a new oxygen plant in Mesaieed. In essence, we are now capable of reaching all the end users in both Ras Laffan and Mesaideed industrial cities.

Qatar has embarked on the vision 2030, the main ambition of which is the diversification of the country’s economy. How are companies like Gasal contributing in this process but also gaining from this? 

Gasal’s management and board is committed to the company’s employees, its shareholders, customers, the public and the state of Qatar to implement all necessary actions to ensure a safe and healthy workplace for all staff, to protect the environment and natural reserves of the country, and to contribute to the competitiveness of the Qatari industry.

Today, we have five air separation units and three additional hydrogen manufacturing plants and an extensive pipeline distribution network. Both in Mesaieed and Ras Laffan, Gasal contributed to the Qatar National Vision 2030 by creating supply networks that improved the efficiency and reduced the capital expenditures of our customers and helped preserve Qatar’s national resources. In addition, Qatar is becoming independent and self-sufficient in the production of industrial gases and the import of industrial gases has been considerably reduced.

What is the significance behind the long-term agreement between Dolphin Energy and Gasal?

Gasal is proud to have been selected by Dolphin Energy for the supply of its nitrogen requirements in Ras Laffan. This long-term supply agreement, using Gasal’s extended pipeline network, provides both parties with an opportunity to reinforce their respective industrial footprint and develop operational synergies. It is also a demonstration of Gasal’s continuous commitment and efforts to promote the development of the Qatari industry.

It is clearly another piece of the puzzle being built in Qatar. Our business model is based on long-term supply agreements. We do invest in infrastructure. We don’t have an exit strategy, long-term is our route to success.

Which other similar activities is Gasal planning in order to support the development of the Qatari industry?

We are already getting ready to grab growth opportunities by further expanding our presence in Ras Laffan. The diversification strategy of the country shall bring more operators to both industrial cities. We are currently preparing a new plot of land in RLIC to host our future investments. We are looking at petrochemical projects like the Al Karaana, Al Seejel, Armomatics & Gasoline projects to bring new significant opportunities  in the air or hydrogen and synthesis gases business.

Since 2006, Gasal has constructed five air separation units and is building three additional hydrogen manufacturing plants. What has Gasal found best and most challenging about its work in Qatar?

The most challenging is to take the right decisions in order to be able to be out there early enough to support the development of other industries. If you wait for everybody to be ready, lined up, and move with their own projects, you may end up being left behind. Our challenge has always been to see what is about to come up, anticipate the trends of the market, introduce the solutions we want to provide to our end users once they have secured their plans and make sure that we are on time for them. In other words, be a cost effective, reliable and safe energy partner. Our aim is to always provide the best solution for our customers.

Gasal has never being shy when it comes to pre-investment. In Qatar, we have successfully anticipated where the country would be moving, and capitalized on it. For instance, compared to the oil and gas majors, we may be considered only as a small complement, but at the same time an essential one. Companies need Gasal and this has already been recognized by all end users. Today, people come to us when they have a need for gas because they understand the value of our business model and what Gasal is able to deliver.

Process safety, highest reliability and energy efficiency were the drivers and motivation for the joint venture. How far do you see Gasal’s position as a role model for your customers in Qatar when it comes to awareness of the environment and maintaining rigorous safety standards?

Gasal is fully leveraging the Air Liquide Group Industrial Management System which has been instrumental in reaching a clean safety record since the inception of the company in 2006 including operation, distribution and construction projects. With currently more than 100 long-term employees, Gasal is proud to have crossed more than 5 million man hours last year without lost time accidents for its own employees and subcontractors.

Safety is Gasal’s number one priority. Our company pursue the proactive development of a safe work environment for its employees, subcontractors and customers. Our objective is zero accidents for each employee throughout her career with the company. We implement a safety management system in line with our industrial management system (IMS), and promote safe practices and behaviors.

Air Liquide is one of the few worldwide players selected by Qatar Petroleum to work closely with them. What has Gasal learnt from working with the state-owned giant? What has Air Liquide been able to bring to Gasal in this successful joint venture?

What we have been able to appreciate from working with QP is that as a very centralized organization, they are capable of very fast development, which is clearly beneficial to investors if you know you have a strong partner to discuss with, to understand the plans, to develop a shared vision, and to close business issues. QP is a high quality contract partner. They have vision, the capabilities to deliver and, of course, they have the resources, hydrocarbons, and the capital. As a clear example of their impressive work, Ras Laffan is today becoming one of the key industrial locations in the world. Adding and consolidating with no pauses and always with the highest standards.

What Air Liquide has brought to the table is technology, know-how and foreign investment. Air Liquide is a world leader in gases for industry, health and the environment, and is present in 80 countries with close to 50,000 employees. Oxygen, nitrogen, hydrogen and rare gases have been at the core of Air Liquide’s activities since its creation in 1902.

Which future do you foresee for Gasal’s operations in Qatar? What do you expect to achieve with the company in the next five years?

In four to five years, we are expecting Gasal to reach a new dimension. We are hopeful to achieve this target as we have repeatedly done for previous ones. We have a clear roadmap to follow and we have the right attitude and resources to be successful. Our path is very clear. Being part of the country’s diversification efforts makes us less sensitive to moratorium on the North field. We have other ways to develop.

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

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