Qatar Calling

Qatar's booming LNG trade has been carving out a name for the country worldwide, and the sea freight industry is jumping on the bandwagon.
ANALYSIS, Ports & Free Zones
INVESTING IN ITS FUTURE: Ras Laffan is working towards becoming a 'multi-purpose, multi-dimensional industry city'.
INVESTING IN ITS FUTURE: Ras Laffan is working towards becoming a 'multi-purpose, multi-dimensional industry city'.
MARKET GROWTH: Double-digit annual rises in the Qatari economy have fostered a huge rise in the volume of sea freight business.
MARKET GROWTH: Double-digit annual rises in the Qatari economy have fostered a huge rise in the volume of sea freight business.


Qatar's booming LNG trade has been carving out a name for the country worldwide, and the sea freight industry is jumping on the bandwagon.

The buzz about Qatar derives from its position as the kingpin of liquefied natural gas. According to sources, the region has more than 15% of the world's proven gas reserves.

Not merely content with the crown of being the world's largest LNG exporter, Qatar's output in terms of LNG looks set to surge even further in the near future - with an expected production of an incredible 77 million tonnes per annum by 2010.

Requests for supply agreements with the region have been coming in thick and fast, from the Far East to Europe - with a growing number of companies making inquiries.

Not surprisingly, the region has been investing heavily in upgrading its shipping facilities to worldclass levels in order to manage this booming trade.

As a result, Qatar not only boasts some very impressive facilities for those wishing to set up base in the region, but it faithfully promises to be a worldclass maritime hub in the not-too-distant future.

Many players in the sea freight industry have been tipping their hats to the LNG production in the region as the key driver to this extraordinary growth. Qatargas, viewed as the pioneer of the country's LNG industry, has been to ensure the safe and reliable delivery of LNG to its customers around the world.

The company exports around 10 million tonnes of LNG per year to Japan and Spain - with a view to expanding this to a staggering 42 million tonnes to markets in Europe, Asia and North America in 2010.

"Qatargas manages the transportation through our ship charter companies who operate the fleet of twelve vessels in total," explains Abdullah Al Sulaiti, Qatargas' shipping manager. Of these, ten vessels take LNG to Japan and two supply LNG to Spain.

"In the case of Japan, these ships have been operating for over ten years and have an outstanding record for safe and reliable deliveries to our customers," he adds.

In order to meet future requirements, Qatargas has been increasing its fleet to meet the demands of substantial expansion.

By the end of the decade, the company will have quadrupled its LNG production and will be supplying customers throughout the United States, the United Kingdom, Europe and Asia. Consequently, its new vessels will need to be larger to meet the demands of the destinations.

"The larger vessels come in the form of over thirty new ship orders of the Q-Flex and Q-Max type, to be used to service the company's new projects currently under construction at Ras Laffan City," explains Al Sulaiti.

Each ship will be 80% larger than the current LNG fleet and have an impressive cargo capacity of between 210,000 and 266,000 cubic metres.

The ordering of such massive new builds shows that the region's shipping industry means serious business. Qatargas is not alone in its bid to bring more super vessels into the region.

Qatar's shipping powerhouse, Nakilat (Qatar Gas Transport Company), is also dominating the influx of ships into the region, expecting to own up to 56 LNG vessels by 2010, making it one of the largest LNG ship owners in the world.

Container vessels are also rising, with companies like Qatar Navigation putting in orders for ships to meet the increase in container traffic at Qatari ports.


Port Expansions

Ras Laffan Port

The world's largest LNG export terminal, Ras Laffan Port boasts three operational LNG berths, capable of accommodating a wide range of vessels, including the Q-Flex and Q-Max classes. A fourth LNG berth is due for completion at the end of this year, with the construction of two more berths under way.

The port also includes three liquid product berths to enhance the export of LPG, GTL and refinery products, with three more liquid product berths due to be completed shortly. Ras Laffan City, the multi-purpose industrial city built around the port, is building two dry docks, capable of receiving some of the biggest vessels afloat, plus a floating dock and ship repair facilities. A new plan for the port layout is designed to cater for a projected 3000 shipments expected in the near future.

Mesaieed Seaport

Located on the east coast, Mesaieed Seaport has developed substantially from a role as a small oil export terminal to a major port, handling a range of petroleum products. The port is regulated by the Port Operations Dept of the Mesaieed Industry City (MIC), which in turn manages all the services relating to Mesaieed's community, land infrastructure and port operations. Commodities imported and exported through Mesaieed Port account for about 60% of the state's GDP.

The port handles over 1000 vessels per year, consisting of tankers, gas carriers, chemical tankers, bulk carriers, feeder container vessels, military vessels, general cargo ships and other types of crafts. As well as two ship-repair and fabrication yards for dry-docking and repairing and manufacturing all types of marine units, the port's facilities include fabrication yards to serve the needs of the oil and gas industries.

New Doha Port

Doha Port has been experiencing capacity shortages due to the rising traffic growth. This has largely driven the plans for the New Doha Port to be designed and built on a 500 hectare site approximately 4km east of the new airport.

The new port will cater for ships carrying up to 5000 TEUs, and will be able to handle up to three million TEUs a year - compared to the 100,000 container capacity at the existing Doha port. The port will be linked to the mainland by an 8.5 km long bridge. The first of three phases for the construction of the New Doha Port is estimated to cost US$4.5 billon, and the port is due for completion by 2025.


For their part, Qatar's major ports, based at Doha, Mesaieed, and Ras Laffan, have been witnessing major improvement programmes to cope with the influx of traffic.

"Previously, what has been lacking was the sufficient port infrastructure, governmental reforms and marketing activities to promote this potential," says Captain Feisal A. Saad, manager at Ras Laffan Port.

"However, things are now changing very rapidly with the expansion of Ras Laffan and Mesaieed Ports, both of which will have efficient container handling berths and operations.

The proposed relocation of the Doha Commercial Port to the new site north of Wakrah will also boost this potential as the new port will be able to handle 2 million TEU when completed," he continues.

Ras Laffan, which operates an industrial port for the region, is in fact working towards becoming a ‘multi-purpose, multi-dimensional industry city'. With a 20-year masterplan drawn up in 2005, the development is being driven forward to meet the current and future needs of the companies based in the area.

"Ports and other logistics facilities have been improving steadily in the Arabian Gulf region in the last five years," Saad points out. "Major expansions of the port facilities are vital to meet the increased shipping volumes, new markets and ship types."

This growth, he argues, has been mainly driven by the huge economic progress encountered recently and all GCC countries have been expanding their infrastructure and encouraging businesses and tourism in their respective countries.

"The port and logistics sector has seen major improvements in order to cater for the increased imports of finished materials and exports of oil and gas products," he says.

Saad believes that this trend is set to continue, with regional shipping in the Arabian Gulf region set to see a rapid rise in both infrastructure and shipped volumes in the coming years.

"The port facilities in the region are increasing in size and efficiency and these will soon rival and may overtake global ports. Qatar's geographical position in the middle of the Arabian Gulf has a great potential to develop into a major transport and shipping hub in the region," he highlights.

Sandeep Seth, managing director of ME & I Satellites, Goltens Worldwide, agrees that the future for the ports looks very exciting. "By 2010 the new Ras Laffan Shipyard is expected be operational, including additional berths that will result in increased sea traffic in the region," he observes.

"Qatar is also developing a world class deep-sea port near Messaieed at a cost of QR 22 billion (US$6 billion)."

Goltens Worldwide, a top provider of specialised repair, maintenance, reconditioning services and trading of engineering components for worldwide shipping, has also set up shop in the region.

Its Qatar hub offers repairs for local and international shipowners and will expand to offshore and industrial sectors by the third quarter of 2008.

"We believe that Goltens is establishing itself in Qatar at the right time and is in a position to offer world class repair facilities to the marine, offshore and industrial clients," says Seth.

"The region is in the midst of an economic boom supported by its expanding production of natural gas and oil and many reputable foreign companies have established themselves in Qatar on the back of these projects," he adds.

Certainly, the government's investment in upgrading the shipping infrastructure has been increasingly attracting other major players, such as GAC Worldwide, into the region which are keen to have a slice of the action.


As well as sea freight services, the logistics operator offers economical consolidation services for cargo from Europe, the Americas, the Middle East and Asia to Qatar.

"Volumes for our sea freight business have been growing steadily at 25% for the past five years, buoyed by a strong economy that has averaged over 10% since 2001," says Ravindu Rodrigo, operations manager at GAC Qatar.

Rodrigo agrees that the state has a lot of global players setting up in the region. "Qatar has been capturing a fair share of the world's attention as the new pearl of the Gulf in recent years," he says.

Like Seth and Saad, Rodrigo agrees that with the oil and gas sector forming the backbone of the local economy, the government has been injecting the revenues into infrastructure and diversify its economy.

"Opportunities are aplenty for global businesses seeking to penetrate the country and even the wider region by setting up a hub or base here.

This is encouraged by the government, which has been opening its economy to foreign investments as part of its diversification drive and strategy to promote an active private sector," he adds.

For Qatar, the flow of new business and ideas into the country can only serve to bolster its growth further. "Various parties from both the public and private sectors in the industry such as the government, port and customs authorities, terminal operators, owners and freight forwarders, all play a part in promoting the development.

Shippers themselves are expecting the same level of efficiency as anywhere else in the world, which helps raise the bar," Rodrigo explains.

In the future, Rodrigo is confident that the industry can expect much more from the region.

"With the International Monetary Fund (IMF) predicting Qatar's real GDP growth to average more than 12% a year until 2012, we expect this positive trend to continue," he concludes.


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