01/06/2009
DOHA, May 31 (Reuters) - Qatar's oil minister said on Sunday exporters should not be too optimistic about the recent rise in oil prices, adding that the Gulf Arab state had put on hold some of its energy projects until demand picks up.
"We shouldn't be too optimistic. We should watch the market and economy," Abdullah Al-Attiyah, who is also deputy prime minister, told Reuters in an interview.
Qatar is rescheduling some energy projects both locally and abroad, he said. "All these projects are for export and for export you need a market and consumption."
The Organization of the Petroleum Exporting Countries (OPEC) left output targets unchanged at a meeting on Thursday, as higher oil prices and optimism the global economy would soon start to recover outweighed concern over high crude stocks.
Oil prices rose to a six-month high above $66 per barrel on Friday, marking its largest monthly percentage gain in more than a decade, after U.S., Japanese and Indian data suggested the economic downturn may be easing.
Al-Attiyah said it is too early to predict when OPEC will start raising production again. OPEC has agreed to output cuts of 4.2 million barrels per day since September to halt price declines.
Qatar has delayed three local projects, including the 250,000-barrel-a-day Shaheen oil refinery and is reviewing refinery projects in Panama and Tunisia to cut costs and assess demand.
The Shaheen refinery project will be looked at in the coming months in view of the drop in the prices of raw materials, the minister said without being more specific.
Al-Attiyah said that state-run Qatar Petroleum (QP) hoped to finalise plans "soon" for a joint venture refinery and petrochemical project in China with PetroChina.
Qatar's Barzan gas field, a project under development by QP and Exxon Mobil Corp, has also been delayed for a few months, Al-Attiyah said, adding that the new target date for start of production from the field will likely be 2014.
The country's gas-fuelled economy is one of the few in the world forecast to grow, between 7-9 percent in 2009, while most of the other Gulf Arab states are projected to contract amid a slump in oil prices from the peak in 2008.
OUTPUT BOOST
Qatar, one of the smallest OPEC members, plans to boost oil output by more than 10 percent to around 1 million bpd oil a day in 2010, from around 900,000 barrels a day now, Attiyah said.
The Gulf Arab state, which has the world's third-largest gas reserves, is gearing up to double its LNG output in 2009 and to hit a target of 77 million tonnes per annum in 2010 by bringing on line the world's biggest gas trains.
Al-Attiyah said that a study on the performance of the North Field, the world's single largest non-associated gas reservoir, may be ready in two to three years. The study would help determine whether to lift a hold on new gas projects.
"We wait until the study finishes, maybe in two-three years, maybe in 2014 ... We have to be sure how the field will react if we want to produce more in the future." Qatar put new gas projects at North Field on hold in 2005 due to concerns that rapid development could damage the reservoir.
Qatar is still waiting for Kuwait's answer to an offer to sell LNG to the Gulf Arab state, the minister said. "We gave them already an offer a few months ago and it is up to them now."
Kuwait, the world's fourth-largest oil exporter, expects its first LNG import terminal to begin commercial operations by August, a Kuwait Oil Company official said last week.
Kuwait has one of the highest per capita power consumption rates in the world and has struggled to meet power demand.
Qatar, which expects to have excess power capacity starting this summer, is also in talks with Kuwait about selling it power through a Gulf power grid, Al-Attiyah said.
"The problem is the grid can't take more than 400-500 megawatt as transit," Al-Attiyah said.
A $2.3 billion power plant under construction in Mesaieed industrial city with a 2000 Megawatt power output is expected to start initial production by August or September, bringing in about 1000 megawatts of extra power, he said.
Qatar is also building a $3.9 billion power and water plant, the country's largest, which will have a production capacity of 2,730 megawatts when it is in full operation by 2011.
The new plants will more than double Qatar's power production capacity to over 9,000 megawatts in 2011 from about 4,300 megawatts now, Attiyah said.
