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Interview

with Florence Verzelen, Managing Director, GDF Suez Qatar

10.07.2012 / Energyboardroom

First, could you please explain to us GDF SUEZ activities in Qatar and share with us the importance of this country for the Group?

GDF SUEZ activities in the country target electricity, gas, energy services and environment. GDF SUEZ is for instance Qatar’s largest Independent Water & Power Producer, with its 40% share in Ras Laffan B and its 20% stake in Ras Laffan C (Ras Girtas). The Group is now working on the latter’s extension. In the gas sector, GDF SUEZ, as one of the country’s 9 operators, is currently preparing the exploration campaign of Block 4, located in the northern sector offshore Qatar. GDF SUEZ will be the first operator to drill the Pre-Khuff formation, which represents a promising target for Qatar. The drilling period should start at the end of 2012 and lasts for one year. In environment, GDF SUEZ is operating 3 wastewater treatment plants, respectively located in Barwa City, Doha West and Lusail. Qatar’s economic potential, as well as its huge amount of incoming infrastructure investments, constitutes a strategic opportunity for GDF SUEZ. The country has the world’s fastest economic growth, with 19% in 2011. 2012 forecasts follow this trend. Similarly, it will invest around 150 milliards USD to host the FIFA World Cup in 2022 and a similar amount to implement its National Vision 2030. GDF SUEZ is ready to use its expertise to serve Qatar’s sustainable growth. Thanks to its presence on both the energy & environment value chain, the Group can provide innovative solutions in various sectors, such as power & water production, water desalination, water & waste treatment, renewable energy and energy efficiency. GDF SUEZ is willing to develop its businesses in Qatar on the long term view.

Qatar has a number of large-scale industrial projects on its core agenda. You have mentioned the issue of water production and water treatment, please share with us what are the main challenges in meeting the increasing demand of water and energy in Qatar?

Water scarcity is Qatar’s major issue. For the time being, the country only has two days of water reserves. The government forecasts water shortage by 2014 and need to double its supply to meet the increasing demand, which is estimated by Kahramaa at 100 million gallons/day by 2016. The country will increase the capacity of its existing IWPPs to meet this demand. For the time being, Qatar has four major power plants which secure an adequate power supply within the country. Qatar has the second highest consumption rate in the region, which is likely to increase due to the infrastructure development plans related to World Cup 2022.

Let’s have a word on the Ras Laffan C project, inaugurated in May 2011. How would you define this project?

Ras Laffan C is Qatar’s largest IWPP. It has a production capacity of 2.730 MW of power and 286 000 m3 of desalinated water. This project, of which construction work has lasted for three years, is a major success for the Group. The opportunity of its extension, ordered by Kahramaa, is a new challenge for GDF SUEZ, and one that the Group is keen to achieve. With such an outstanding level of growth over the recent years, Qatar is becoming a very attractive place from a business development point of view; therefore Qatar is a highly competitive market, with lots of local and international players trying to get their grasp on such a fast moving economy.

How would you assess your competitive advantage, and why were you appointed as the preferred bidder and partner of choice for a project like Ras Laffan C for instance?

As the world’s first utility provider, GDF SUEZ has been able to build significant experience as well as a strong reputation over the years. The Group’s market knowledge and its ability to bid on time and without incidents were key elements to become a reliable partner of Qatari authorities.GDF SUEZ is also the first independent power producer within the region, which can also explain why it has been appointed as a preferred bidder. In addition, GDF SUEZ has built good relations with Qatar Petroleum and Qatar Electricity and Water Company. The Group is able to understand their needs and to meet them with tailored solutions. To strengthen these relations, GDF SUEZ and QP have signed a Memorandum of Understanding to explore project opportunities outside Qatar. The Group is willing to sign a similar partnership with QEWC.

QP has embarked on an internationalization process with its subsidiary QPI. It has ventured with TOTAL in Mauritania notably. Please elaborate on this MoU you have with QP?

GDF SUEZ is working on the MoU with Qatar Petroleum International, with the support of His Excellency Dr. Mohamed bin Saleh al-Sada, Minister of Energy.

Going back to Qatar, the moratorium in place on the North Field is meant to come to an end in 2014, although there is still uncertainty whether it will be further extended or not. What does this mean in terms of opportunity for GDF SUEZ?

If the moratorium comes to an end, the opportunity would be to enter another exploration license in the North Field as well as collaborate on potential projects in Ras Laffan Industrial City, which could allow the Group to produce LNG in Qatar. This is a 2-year perspective . Meanwhile, GDF SUEZ is committed to achieve its exploration campaign on Block 4. Two wells are going to be drilled, one for oil and one for gas. After these wells, 7 to 8 wells will be drilled in Qatar, under other licenses. These prospects constitute a major step forward for the future of the energy industry here. Qatar has the largest polluting rate per capita. However, we are witnessing a strong trend for green initiatives; the Ministry of Environment is a relatively new initiative, Doha will host the next Conference on Climate Change; these are all strong signals about the political willingness to address this issue.

Sustainable development is at the core of GDF SUEZ’s development strategy, so what are you doing here in that respect at the front run of operations and how can you contribute in helping this country to reduce its level of emissions?

GDF SUEZ not only focuses on sustainable development but also on energy efficiency. Qatar is currently developing two green cities: Lusail City and Msheireb. The Group could contribute to these projects with energy efficiency solutions for building, even for transportation. In the industrial sector, in Messaieed Industrial City for instance, GDF SUEZ is already collaborating with local industries in the energy efficiency sector, to help them reduce their activities’ environmental impact. The Group has also developed research programs on renewable energy and energy efficiency which could also bring an added value to the local initiatives.

Let’s look at the whole picture. This is a country that has reached outstanding performances, 77 million tons of LNG produced in 2011, which represent 60% of the GDP, 85% of export earnings… we are seeing added value created downstream with all QP’s petrochemical affiliates, whether it is in fertilizers, lubricants or else. According to you, what is the next step, and what are the biggest opportunities and difficulties that this country will be facing in the up-coming years?

Energy efficiency is undoubtedly Qatar’s major issue. Significant improvement in the construction sector for example will be necessary to reach the government’s goal of a sustainable growth, as written in the National Vision 2030 or the goal of zero carbon emission set for the World Cup. As I already mentioned, Qatar has the second highest power consumption rate in the region. This is mainly due to cheap electricity. Therefore, reducing the consumption will require strong political will and awareness campaigns to change local habits, especially towards young public. I have a personal question now; behind ideas and initiatives, you always find people.

Our readers are keen to identify whom their counterparts are in this country, to find out more about your personal background; therefore allow me ask you how did you end up being assigned here?

Good question; I actually took a plane and flew here!More seriously, I have done many different things in my professional life that it is difficult to explain. I used to work in New York, in the investment banking sector. Then I moved to the European Commission in Brussels, where I was involved in trade negotiations and antitrust cases. I have been advisor to the French Minister of Foreign Affairs before joining GDF SUEZ a few years ago. I was initially in charge of business development and then the opportunity of running Qatar’s office came up. I took it with enthusiasm.

Last word based on all different topics that we touched upon today together, what is the final message of confidence that you would like to convey to our readers about Qatar ?
With 1/3 of the world’s gas reserves and major incoming events such as the FIFA World Cup 2022, Qatar represents a country of opportunities. Lots of projects will be developed here and will require expertise and competencies in various fields. In this regard, if a company would like to expand its activities abroad, Qatar should definitely be on their radar.

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