Qatar Boosts LPG Output and Strikes LNG Deal with Investment Needy Greece

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Researched by Industrial Info Resources (Sugar Land, Texas)--Saad Abdullah Al Kuwari, the chief executive of independent, government-backed organization Qatar International Petroleum Marketing Company (Tasweeq) (Doha, Qatar), forecasts that the country will increase its output of liquefied-petroleum gas (LPG) to 12.6 million tons per year by 2012, making it one of the largest LPG producers in the Middle East.

Qatar currently produces about 8.2 million tons per year of LPG, with 90% of the condensate products such as naphtha, gasoline and gas oil, in addition to LPG, headed for the Asian market.

Al Kuwari also indicated that the increased production would come from new liquefied-natural gas (LNG) trains. He suggested that demand would increase because the U.S. is entering the peak driving period of the year and because of a high demand from China for polymers. Naphtha is predicted to have the highest growth rate among oil products.

However, the high proportion of exports to the Asian markets could change. A meeting between Qatar Prime Minister Sheik Hammad bin Jassem bin Jabor Al Thani and his Greek counterpart, George Papandreou, in Athens recently resulted in a non-binding memorandum of understanding between the two countries, covering the export of LNG to Greece and the construction of LNG terminals in Greece.

The Qatari prime minister is interested in investing up to $6.66 billion in energy projects in Greece, a move welcomed by the Greek prime minister as his country faces economic hardship and a financial crisis.

Greece is the least competitive country in the Euro zone, and in the past few days has been the beneficiary of a $141 billion bailout organized by the European Union and the International Monetary Fund (Washington, D.C.). The country is desperate to receive foreign investment to alleviate its balance of payments deficit.

Under the memorandum of understanding, the two countries will investigate various energy projects in Greece, among them the Astakos energy center development project in the Aitoloakarnarnia region of western Greece.

The Qatar investment in the project will be made by Qatar's state-owned Qatar Petroleum (Dohar, Qatar), while the Greek partner in the agreement will be the Maritime and Industrial Area of Astakos, which is jointly owned by the Piraeus Bank S.A. (ATH:TPEIR) (Athens, Greece), the Emporiki Bank of Greece S.A. (ATH:TEMP) (Athens) and the Alpha Bank S.A. (ATH:ALPHA) (Athens).

The project is expected to result in the creation of some 1,500 jobs, and the investment is expected to be more than $4.5 billion, turning the port of Astakos into a major strategic development center.

Among the proposals for the center are regasification and storage facilities for an estimated seven billion cubic meters of LPG, together with an electricity generating station. Of the electricity produced, 30% will be used for the Greek national grid, and 70% will be channeled into the Italian national grid.

Other significant agreements signed between Qatar and Greece include a bilateral agreement for cooperation on air travel, cooperation on tourism, and an agreement covering the exchange of news items between the Greek and Qatari national news agencies.

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