Opinion and Analysis
President Uhuru Kenyatta meets Qatari minister for Transport, Jassim
Seif Al-Sulaiti, in Doha during his recent visit. The country is the
global best practice in natural gas value addition. Photo/FILE
By George Wachira
In Summary
- Capital flow and experience from oil and gas managers make list of key gains.
The recent presidential trade mission to Qatar
is an indication that for Kenya, international trade need not be
entirely defined in terms of West or East.
In deed investment capital and business
opportunities do exist in the Middle East. Qatar is one of the
successful and progressive ‘petro-dollar’ economies of the Middle East
that can do good business with Kenya.
To many Kenyans, Qatar is the home to the popular
Aljazeera TV and also the country that surprised many by bidding and
wining to host the 2022 FIFA World Cup.
However, what is outstanding about Qatar are its
successful oil and gas enterprises that have set the country apart as a
global best practice in natural gas commercialisation and value
addition.
Qatar has the third largest proven reserves of
natural gas in the world after Russia and Iran. When global energy
demand exploded about 10 years ago, opportunities to commercialise Qatar
natural gas reserves opened up.
About the same time, there was environmental
clamour (Kyoto Protocols) across the developed world to convert to lower
carbon fuels of which natural gas was a strong candidate to replace
high carbon coal.
However, Qatar natural gas was “distant” from the
key energy demand centres of Europe and Far East since it could not be
easily transported by pipelines to these markets.
This prompted Qatar and other “distant” natural
gas producers to develop appropriate technologies to transship
refrigerated natural gas liquid (Liquefied Natural Gas-LNG) to these
markets. Today Qatar is the leading global exporter of LNG.
It looks like the priority agenda for the Kenyan
delegation was to commit Qatar to supply LNG for its planned 700MW power
plant in Mombasa. This is part of the “5,000MW in 40 months” power
generation program currently under implementation by the Jubilee
government.
Incidentally Qatar also has an installed power
generation capacity of about 7,800MW, mainly using natural gas. This
fact may additionally make Qatar a potential investment partner in the
Mombasa LNG power plant.
The Kenyan energy authorities have previously
stated that power generated from imported LNG shall lower the weighted
average cost of Kenyan electricity. It can, therefore, be assumed that
the LNG prices offered by Qatar will make this objective achievable.
It would be a sweet surprise for Kenya if the
completion of the planned Mombasa LNG power plant coincides with
commercial discoveries of natural gas from the ongoing exploration
efforts at our coastal areas.
Power generation is most of the times the first line of commercialisation of locally produced natural gas.
Further south in Tanzania and Mozambique there
will be (in about four years time) availability and exports of LNG which
could become an alternative source of LNG for the Mombasa power plant.
In respect of natural gas value addition, it is in
the area of Gas to Liquid (GTL) technologies that Qatar has won global
accolades.
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