1. The Challenges of Becoming the World’s Leading Supplier of LNG
Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
Distinguished Guests, Ladies & Gentlemen,
It is a great honor for me today to address such a distinguished audience at this first ever Qatar Economic Forum, and to share with you “The Way forward for Qatar’s Gas Industry”.
Allow me to first introduce myself, my name is Faisal Al Suweidi and I am the CEO for Qatargas.
The Challenges of Becoming the World’s Leading Supplier of LNG

2. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
As background, Qatargas began delivering LNG to Japan and to Spain in Our sister company RasGas started production in 1999 with deliveries to Korea. Since startup, both projects have expanded and in 2005, Qatargas and RasGas together produced and sold over 20 million tons of LNG.
The Sponsors of this “Qatar Economic Forum” have asked me to speak to you today about “Qatar’s Global LNG Strategy & Expansion Plans; and the Challenges in Becoming the World’s Leading Supplier of LNG”.

3. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
As you have seen in the press, Qatar is changing the face of the Gas and LNG Industry, and will be critical in solving global security of supply concerns over the next decade and beyond.
Qatar is committed to developing its tremendous Gas Reserves and has aggressive expansion plans not only in LNG, but as regional pipeline gas and as GTL.
Qatar expects to participate globally in every LNG Market in the World and is aggressively using Technology to capture economies of scale, reduce unit costs, and to compete long-term both in traditional Asian LNG Markets and in the emerging liquid Markets in the Atlantic Basin, particularly in the UK and US.
Following the recent “Foundation Stone Laying Ceremonies” for both QG3 and QG4, Qatar is well on it’s way to becoming the largest LNG supplier in the world with a Goal to produce 77 MTA by ~2010.
Before we begin, please allow me to provide a brief “scene set” of the Global requirements for LNG, to highlight the significant opportunities for Qatar LNG.

4. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
In traditional Asian LNG Markets, gas demand is projected to grow at a healthy 5% per year rate, with new LNG opportunities concentrated in the emerging China and India Markets. Japan, Korea and Taiwan are also in need of additional LNG supplies by 2010 to 2012.
Japan remains the largest LNG market in the world at nearly 60 MT, and growth is beginning to accelerate as economic conditions, supply disruptions, and nuclear power industry uncertainties increase LNG demand.
Consequently, there are significant growth opportunities for LNG in Asia beginning around 2010.

5. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
In Europe, on the other hand, gas demand growth is projected at 2.5% per year (primarily due to power consumption), and with declining North Sea Production and expected delays from new long-distance Russian pipeline supplies, LNG has an opportunity to capture significant market share.
By 2010, Europe will require ~50 MT of additional LNG.
Qatar is aggressively pursuing this demand and has announced plans for ~15 MT to the United Kingdom, ~5 MT to Northwest Europe and France, ~5 MT to Spain, and ~5 MT to Italy.

6. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
And finally, the emergence of the US as a LNG market, provides a tremendous opportunity for Qatar and other LNG Suppliers.
Despite significant new pipeline gas from both New Discoveries and Artic Sources (such as Alaska and Western Canada), the US will still require significant quantities of LNG.
Although Gas Demand growth is projected at a modest 1.3% per year rate (according to the National Petroleum Council), this results in a huge US requirement of ~50 MT of LNG by 2010 and over 100 MT by 2020.

7. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
It is indeed a great time to be in the LNG Business.
Global LNG Demand is expected to double by 2010 to 250 MTA and grow to over 430 MTA by 2020.
During this time period, liquid markets in the Atlantic Basin are expected to overtake the Asian Market as the largest LNG Market in the World.
To Supply this demand, Middle-Eastern Suppliers must meet the challenges of supplying both East and West. Further, our industry must invest huge sums of money (potentially $200 billion dollars worldwide) to develop new projects at an unprecedented pace.
By 2015, MiddleEastern Suppliers are expected to produce over 30% of Global LNG requirements! And Qatar is well positioned to capture a large portion of this demand.

8. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
Given these Global LNG Supply opportunities, let me now define Qatar’s Strategy for capturing this value, which we call the “Qatar Competitive Advantage”.
The Foundation of Qatar’s success, is Qatar’s massive North Field which has over 900 TCF of proven gas Reserves and covers over 6000 square kilometers in territorial waters of the Arabian Gulf.

9. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
The gas industry in Qatar has strong support from the Qatari Government, which is committed to develop Qatar’s gas resources efficiently and as quickly as markets will allow.
Further, Qatar is financially secure with a credit rating of A+ and an economy which grew over 20% per year in 2005.

10. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
To help accomplish it’s vision, Qatar Petroleum has selected strong partners for developing the North Field Gas Resource.
Qatar has strong relationships with Japan, Korea, the US and Europe, and is “Investor Friendly”.
Multi-National Oil Companies including ExxonMobil and Total currently participate in our LNG Joint Ventures, along with several Japanese Trading Companies.
In addition, new relationships have been developed with players such as ConocoPhillips and Shell to capture US LNG and GTL Market opportunities.

11. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
Qatar’s transformation began in 1992, when the Government of Qatar and Qatar Petroleum committed to construct the largest LNG port in the World for ~$1 billion dollars at Ras Laffan. Incidentally, this investment decision occurred prior to any firm Buyer commitments to purchase LNG.
This port, originally designed for ~50 MT of LNG, will be doubled in capacity over the next few years to handle all of Qatar’s Expansion Plans, including ~100MTA of LNG, as well as condensate, LPG’s, and GTL products.

12. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
Shown here is a plot plan of our Qatargas site, with three trains in operation, and space for our future expansions including our QGII, QG3 and QG4 large trains.
In addition, the RasGas site is immediately to the South of this location.

13. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
And Finally, Qatar has a distinct Competitive Advantage demonstrated by it’s excellent track record for operational reliability, the ability of it’s Management to make quick decisions, develop projects safely and Manage Risks.

14. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
As an example, Qatar is a Leader in Technology and a pioneer in the development of Large LNG Liquefaction Trains.
With each new expansion train, Qatar has set the record for the largest train ever built.
In 2007 / 2008, QGII will commission two 7.8 MT trains which will again set a new benchmark for LNG Liquefaction Technology.
The scale and technology employed will provide an efficiency that is unmatched in the industry, and will allow us to compete in every market around the globe. In fact, few LNG projects have the resource base to build trains of this size.

15. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
Conventional LNG Tanker
138k m3, 4 cargo tanks
An important factor enabling Qatar LNG to compete worldwide, particularly in the liquid UK and US markets, is the advancement in large LNG ship technology.
Qatar has actively developed and technically qualified Large LNG Tankers in a range from 210km3 (which we call Q-Flex) to Tankers as large as 265km3 (which we call Q-Max). These Tankers are nearly twice as large as the largest LNG Tankers in existence today at 145km3.
In October 2004, QGII ordered 8 Q-Flex ships; the first in the LNG Industry, and has since ordered 6 Q-Max, with many more to come.
The prize is significantly lower shipping costs, which will allow Qatar to expand our global reach and compete long-term.
Q-Flex
210 – 217k m3, 5 cargo tanks
Q-Max
k m3, 5 cargo tanks

16. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
We believe that our Geographical location is an asset that allows Qatar to supply LNG cargoes both East and West. Combined with technology and Qatar’s vast resources, Qatar’s competitive reach extends to virtually every gas market in the world.
In addition to our Asian LNG Markets (including Japan, Korea, Taiwan & India), Qatar will provide significant volumes into the Atlantic Basin. By ~2010, we expect to deliver nearly 60 MTA West of the Suez (into the United Kingdom, the United States, Belgium, Spain, France and Italy).
Qatar is not only diversifying its Market Portfolio, but is progressively moving downstream in the value chain by taking ownership positions or capacity in Terminals in the Med (Rovigo), the UK (SHLNG), Zeebrugge, & potentially the US (Golden Pass, Elba Island).
Proactive Marketing Strategies & Innovative Commercial Arrangements including partnerships with international companies with downstream marketing expertise, allows us to accept liquid market price risk.
Unlike other LNG suppliers, who must select which markets to compete in to optimize their netback from limited resources, Qatar can diversify globally.
As of YE 2005, Qatar has delivered ~1750 cargoes to more than 20 Buyers worldwide

17. Qatar has Plans to Reach
Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
Qatar LNG Expansion Plans
Qatar has Plans to Reach
77 MTA by
Qatar’s Vision has grown to an expectation of producing ~77 MT of LNG by 2010 to 2012, with participation in every major LNG market in the world.
As demonstrated by the QGII, QG3 & QG4 projects (which have all achieved Financial Close), we are aggressively using Technology to capture economies of scale, reduce unit costs, & ensure long-term competitiveness. Further, we have introduced a “New Business Model” with aligned partners along the entire value chain.
Each of these opportunities, requires competitive, efficient, terminal access, and we are pursing multiple opportunities along the Gulf Coast, East Coast and other locations, to accommodate our plans.
In addition, Qatar is diversifying it’s available products, through development of GTL’s, regional pipeline projects such as Dolphin and Al Khalej, a Condensate Refinery, Petrochemicals and Helium.
Qatar has no shortage of opportunities!

18. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
However, for Middle East Suppliers to capture these opportunities, we recognize that we face many challenges, and need strong support from Governments and Regulators, as well as Contractors, Suppliers and Partners.
The Challenges of evolution to a Global LNG Market, as well as meeting growing security of supply concerns, are significant and include:
Strong competition
Price Risk
Access to Terminals which can accept our Large LNG Ships and Lean LNG Quality
Local Regulatory and Permitting Challenges
Financing these “World Scale” capital-intensive projects
And finally, Ship Building Capacity and EPC Contract Resources which will be stretched to the maximum to deliver this required new capacity.

19. Qatar’s Global Strategy and The Challenges of Becoming the World’s Leading Supplier of LNG
In summary, I hope I’ve conveyed to you the significant opportunities and role that Qatar will play in supplying gas Globally.
Despite the many challenges, Qatar aims to be the largest LNG supplier in the world and the Supplier of Choice for our customers.
Thank you very much for your kind attention.