Chairman's Message

Qatar Petroleum: Leading Qatar to Become the World's Largest LNG Exporter

On behalf of the Board of Directors, and all directors, managers and staff of Qatar Petroleum (QP), I would like to convey our profound gratitude and highest respect to His Highness Sheikh Hamad Bin Khalifa Al-Thani, the Emir of the State of Qatar, and His Highness Sheikh Tamim Bin Hamad Al-Thani, the Heir Apparent, for their continuous support and encouragement in guiding us to deliver the vision of His Highness the Emir for the optimal utilization of our natural resources, through which we pursue our efforts to make Qatar the global largest LNG producer, and QP a world energy leader.

In the history of QP, 2006 was a true landmark year in many aspects, during which the corporation managed to distinguish itself as one of the global leaders in energy projects. On the national level, QP pursued its major role aimed to generate the main part of the national income, while, at the same time, providing the energy products for the domestic community and local industries. It developed excellent capabilities in managing resources, and became more efficient and commercially focused.

In the crude oil business, QP has been producing over half of Qatar’s total oil output, with the rest generated by international companies operating under production-sharing agreements covering oil fields. The current total oil output of 850,000 barrels per day (b/d), is expected to reach around one million b/d by the end of 2009. The development of the offshore Al-Shaheen field, announced by the end of 2005, will increase the production capacity of the structure to more than half a million b/d by then.

At the same time, QP continues to focus on four main areas, namely the liquefied natural gas (LNG), gas-to-liquids (GTL), gas pipeline exports, and gas feedstock for local industries and power plants. In addition, great expansion continues in the fields of petrochemicals and heavy industries.

During the year, Qatar witnessed the conclusion of agreements, the laying of the foundation stones and the coming on stream of a number of various gigantic projects, including a condensates refinery, an aluminum smelter, and two GTL plants. 2006 also witnessed the starting of work aimed at expanding the Ras Laffan Port, the construction of a dry dock for ship repairs, and the manufacturing of supportive materials, as well as the enhancement of ethylene and poly-ethylene output, and the production of an increasing volume of gas to meet the growing local needs.

In terms of mega projects achieved, the most impressive accomplishment was the prestigious inauguration of the Oryx GTL plant; the key step in Qatar’s bid to become the GTL capital of the world. The Oryx Project is scheduled to yield 34,000 b/d of clean GTL products. The other major step on this bid was the launch of the world-scale integrated Pearl GTL project, which will consist of two 70,000 b/d GTL trains and associated facilities, to be completed by 2010.

The phase two of Al-Khalij Gas (AKG-2) project, launched in July 2006, will further contribute in the rapid monetization of the country’s huge gas reserve. The AKG-2, scheduled to start up in the second half of 2009, will supply natural gas to domestic markets while recovering associated condensates and natural gas liquids.

With the coming onstream of RasGas Train 5, Qatar is on target to become the world’s largest LNG producer and exporter with production capacity of 30 million tons per year. The expansion in natural gas projects will result in Qatar’s LNG production capacity reaching 77 million tons per year by 2010. In that context, the foundation stone for Qatargas 3 and Qatargas 4 LNG trains were laid during the year. Those projects are expected to generate a total of around 15.6 million tons of LNG per year, most of which are targeted for the United States markets.

2006 also witnessed the continuation of work on the Dolphin project, which aims at supplying up to 2 billion standard cubic feet per day of natural gas to the United Arab Emirates (UAE) through an offshore pipeline. The scheme is expected to come on stream by mid-2007.

In developing its mega projects, QP continues to implement an integrated approach, through either designing new projects adjunct to other existing plants in order to maximize synergies from the simultaneous execution of those projects, or optimally utilizing upstream feedstock in new local industrial projects. The ethylene cracker of the Ras Laffan Olefins Company, which is one of the largest crackers in the world, will use part of the feedstock produced in connection with the Dolphin project to yield 1.3 million tons of ethylene per year. Another example of how QP coped with this approach was the construction of the Laffan condensate refinery, with planned processing capacity of 146,000 b/d of gas condensates.

In the meantime, QP is working hard towards a goal of no harm to people and no harm to the environment. Maintaining the quality of the environment for future generations is an important part of these efforts to ensure the protection and welfare of people, environment and QP facilities.

We also continued to achieve progress in the Five-year Strategic Qatarization Plan in terms of mobilization of resources, close liaison and coordination between the Energy & Industry Sector and other ministries and educational institutions. At the end of 2006, Qatari nationals accounted for 1889 of QP’s workforce, or 21% of permanent positions in the establishment. A major achievement in this respect was the setting of the first Qatar Career Fair, which highlighted employment opportunities in Qatar’s energy and industry sector.

QP continued in 2006 to play a significant role in organizing and hosting international and regional energy conferences. The most significant event was The 10th International Energy Forum, in which 59 countries and six international organisations took part. Other major events included the 11th Middle East Gas Summit, and the International Symposium on Natural Gas and Sustainable Development. The choice of Qatar to host such major events is due, among other reasons, to the fact that most of the world-class energy players have strong business relations with the State.

I would like finally to express my sincere appreciation to the QP management and staff for their outstanding professional efforts and dedication to making 2006 the year of great milestones in the history of the corporation, pursuant to the wise vision and long-term strategy set by HH Sheikh Hamad Bin Khalifa Al-Thani, the Emir of the State of Qatar.

Abdullah Bin Hamad Al-Attiyah

Deputy Prime Minister
Minister of Energy and Industry
QP Chairman and Managing Director