Qatar Gas Distribution Model is a Structured Solution for Diversification and Distribution
“Qatar gas distribution projects” had begun at Renaissance Doha City Centre Hotel on 8th December 2013. Dr. R. Seetharaman, CEO of Doha Bank gave the key note address on the first day on “Role of banks in financing gas distribution projects – Case of Doha Bank “. Energy specialists, economists and bankers participated in this session.
Speaking at the conference Dr. R. Seetharaman gave his outlook on Qatar economy. He said “Qatar GDP at current prices is close to $200bn and the current account balance as a % of nominal GDP is more than 25%. Aggregate GDP growth in 2012-2016 is expected to average to 6.9%, with hydrocarbon GDP growth at 4.4% and Non- Hydrocarbon GDP by 9.1%. Qatar’s Vision 2030 focuses on Human, Social, Economic and Environmental development.”
Dr. Seetharaman gave his insight on major Gas projects in Qatar. He said “Qatargas has seven LNG trains. Qatargas 1 consists of three onshore LNG trains with a total combined capacity of 10 million tonnes per annum and mainly caters to Japan. Qatargas 2 includes two world class LNG trains each with a capacity of 7.8 million tonnes per annum which serve markets in the United Kingdom, Asia and Europe. Qatargas 3 project involved a LNG mega-train with a capacity of 7.8 million tonnes per annum which ships its LNG predominantly to the United States, Asia and Europe. Qatar Gas 4 involved new LNG mega-train with a production capacity of 7.8 million tonnes per annum and supplies LNG to United States, Asia and Europe. RasGas operates seven LNG trains with 37 million tonnes per annum of production capacity. Doha Bank had provided project finance syndication faciltiies to projects such as Barzan Gas and Qatar Gas 2. Doha Bank also made investments in bond issues raised by Ras Gas and Nakilat.”
Dr. Seetharaman gave his insight on Gas transportation projects and their mode of financing. He said “Gas transportation project have diversified sources of fundings such as commercial banks, export credit agencies, bonds and subordinated debt. Lenders have security such as Interest in Vessels, Collateral assignment of material contracts, and Security interest in required insurance policies. Stable cash flows are achieved by mitigating risks such as operations risk, shipyard risk, interest rate and other risks. Nakilat is one of the major Gas transportation projects in Qatar with a combined carrying capacity of over 8.5 million cubic meters.”
Dr. Seetharaman highlighted the trends in financing gas distribution projects. He said “ The risk appetite, project size, key parameters in relation to maturities& securities, single arranger vs syndication are the key areas considered when financing gas distribution. The unique features of gas projects include trunk pipelines and distribution networks, Gas transmission pipelines, cash flow volatility and environmental issues. Regulatory changes had also impacted financing of gas distribution projects. Asian development banks & Export Credit Agencies which participate in various projects in the region can also look for participation in gas distribution projects.”
Dr. R. Seetharaman gave insight on major Gas distribution projects in GCC. He said “Marafeq Qatar is involved in the Gas network in Lusail City which will serve residential, commercial and hospitality developments. The Dolphin gas project which supplies gas through subsea pipeline to UAE and Oman meet the requirements of customers such as Dubai Supply Authority and Oman Oil Company. The Taweelah – Fujairah Pipeline can meet the requirements of Dolphin’s customer the Abu Dhabi Water and Electricity Company. Natural Gas Distribution Company and Oman Gas Company provide gas supply for various industries in Saudi Arabia and Oman respectively. Diversification will result in increase in usage of gas in GCC for commercial and residential purposes. Sectors such as Steel and Aluminum may witness increase demand for power resulting in increased demand for gas. Growing residential population will also result in persist demand for gas for residential purposes. Qatar Gas distribution model is a structured solution for diversification and distribution.”