Qatar's Energy City and Saudi's Ras-al Zour Industrial City to Capture Downstream Potential of Middle East Resource Wealth

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Researched by Industrialinfo.com (Industrial Information Resources Incorporated; Houston, Texas). "A nerve center of global oil and gas business in the Middle East" is how Nasser Hassan Al Ansari, chief executive of Al Addiyar Real Estate Investment Company, described the master plan for Qatar's 'Energy City' project. Saying that the construction of the project would begin in the third quarter of 2005, he claimed that the ground-breaking development would raise the global stakes of the Middle East's energy sector, reshape the dynamics of its business, and expand its role in the management of above-ground resources.

Al Addiyar, a state company with a capital base of $1 billion will be partnered in the project by Gulf Energy, a global consortium of leading energy consultants, researchers, and academics. Gulf Energy will develop the marketing and technical strategies of the project.

Energy City (EC) will be positioned, as the first integrated energy-hub in the region, to enhance the Gulf region’s ability to capture critical revenue streams and act as a nucleus for the core elements of the vertical elements of the region's oil and gas industry.

The Core Research Lab and Data Center will contain a main research laboratory linked to a geology and geophysical analysis facility. A research satellite section will be available for applications in the environment, renewable energy, and regulatory policy. In collaboration with Imperial College London, Texas A&M, and IFP, an education and training center, with regional affiliations, will be set up.

Classed as a 'multi-billion' project, Energy City will house an integrated complex, where international and state-owned oil companies and service providers will base their operations, and where asset classes, such as hi-tech data and infrastructure, will be integrated with communications and advanced management. The center will also have a shipping and trading component, which will be sited at suitable locations in the Gulf area, while remaining part of the EC project. The center will also house the Gulf Mercantile Exchange (GMEX), trading rooms, and brokerage offices, and will serve as a base for shipping and logistics.

The service industry satellite will serve as a base for the oilfield services industry, covering drilling, service, EPC contractors, offshore suppliers, and seismic companies. The infrastructure and downstream satellite will house downstream companies.

Opportunities will also be available for real estate investment in hotels, exhibition halls, and malls.

Nasser Al Ansari said that the EC will place Qatar on the world energy map, joining the league of other key energy centers, such as Calgary, Singapore, Houston, Stavangar, and Aberdeen. He added that the EC would take the Middle East much beyond its role of just controlling half the world's oil and gas reserves.

The Qatar development, early this month, was followed by an announcement by Saudi Arabia's state-owned mining company, Maaden, that leveling work at the Ras Al Zour site would go ahead, in preparation for construction of the 640,000- ton-per-year, $4.4 billion aluminum smelter and a 3-million-ton-per-year, $1.7 billion phosphate plant. The two projects will be the anchor projects for an industrial city, which represents the largest ever diversification undertaken in the country. For related news item see - March 7, 2005 - Saudi Privatization Rainbow Points Way to Maaden's 100-ton Gold Crock in 2010.

The Raz Al Zour project includes an 1,800-MW power station and is dependent on the construction of a $2 billion rail link from the northern phosphate and bauxite mines to the industrial site, which is 60 kilometers north of the Gulf coast industrial zone of Jubail.

Cheap energy and local feedstock should make the new site the lowest-cost producer for di-ammonium phosphate in the world, and aluminum costs are projected to be in the 'lowest quartile' of global producers. Production is scheduled for 2008 for both plants. Bids for the construction of the phosphate plant will open in early 2006. Talks are underway with potential joint venture partners for the power and aluminum projects.

The privatization of Maaden's gold, phosphate, aluminum, and industrial metals divisions has been targeted in three years time, but the company's chief executive, Abdullah Dabbagh, said that the government might want to accelerate this schedule.

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