What were the key highlights of 2011 for Energy City Qatar?
AL-EMADI: I think 2011 was a very good year for us because 2011 was a very good year for the real estate sector in Qatar. After the announcement of the 2022 World Cup, we saw a lot movement and growth in that sector and demand is now much higher than it used to be. Many companies are now moving to Qatar and there is growth in population. The confidence in the market is now much better. That affected the movement in the real estate sector. In 2011, we have completed the infrastructure and many projects have started on site. We are now at the phase of making many changes in terms of the company structure. That will help us to focus more on the development side as we've now finished the infrastructure.
We are doing very serious negotiations with a number of energy companies. I think the Energy City project will be very important in the coming 2-3 years. For the energy companies and the multinational companies who are coming into Qatar, Energy City is the only place which is freehold. We have designed the city to be very state-of-the-art in terms of the services we will be providing there. There will be a need for such a business park in Qatar to serve these companies. I think there is a lack in Qatar for such a commercial area or center. I’m sure that it will be most attractive for the energy companies because more than 70% of the companies here in Qatar are focused on the energy sector. So 2011 was a very good year for us and I expect that 2012, 2013, and 2014 also look very promising.
What is the latest update with regards to timetables for Energy City Qatar?
AL-EMADI: In the first phase we were focusing on the infrastructure and the major infrastructure work is completed on site. We are now in the second phase, the development phase. The buildings are low rise so we don’t expect it to take more than 2-3 years until the city is partially operational and the buildings are open and people are moving there. So we expect that, 2-3 years from now, many of the buildings will be completed, but not all the buildings. We are putting a time-frame of 5-6 years maximum to complete most of the lands in the city. The development is very much a function of different factors which usually move a development, such as demand, supply and many other things related to the whole project of Lusail, because we are part of bigger project called Lusail. So how the development of Lusail will be moving in the coming 2-3 years, and specifically the projects which are next to our lands, will be some of the many factors which will be affecting the development. But I expect that in 5-6 years, the city will be fully developed and if we can reach that, than we will have been very successful.
How is the company dealing with the move from the infrastructure phase to the development phase?
AL-EMADI: On the company level, we are trying to prepare ourselves for the coming 5 years. We know that there are many challenges and this is why we have been working over the last 2 years on the re-structuring of the company, which is about to be completed very soon. This restructuring will allow us to attract more investors and to bring on board new investors who I think can add value to the project. We are also working on structuring our debts and loans and that will all be based on a longer-term as opposed to a shorter-term. As we are moving into development, rather than infrastructure and land-sales, our plan has changed and it will require more funding on the longer-term. We are about to finalize the whole financial and company restructuring and I think this will be very effective and will take the company into a whole new dimension. I think it will help improve the current status of the project.
What is your overall outlook for the energy sector in Qatar?
AL-EMADI: Qatar is the largest exporter of LNG with a capacity of 77m tonnes per year. The energy sector in Qatar is very promising. Currently, Qatar is one of the leaders on the energy map. I expect in the coming 5-10 years that the sector will grow, especially on the downstream side. I expect more downstream industries, energy intensive industries. Now, they are launching the polysilicon plant and Qatalum, the aluminium industry; those are very energy intensive. So we’ll see lots of petrochemicals. We have large quantities of feedstock from gas and that can be utilized for many different industrial petrochemical lines. I expect the sector to grow in the coming 5-10 years but more on the downstream side because now the upstream is reaching the limit. So the energy sector in Qatar is very promising and Qatar is now considered one of the key energy cities in the world.
As Qatar moves forward with economic diversification plans, what role will energy continue to play in the country’s economy?
AL-EMADI: I think energy will remain the dominant and main source of income for the country and most of the activities will be directly related to, or involved around, the energy sector. The energy sector will remain the biggest sector in Qatar with the biggest share of GDP of the country. I think most of the activities are in one way or another related to this huge sector which is contributing to the major income of the country. This income, and the government expenditure, is related to the prices and income from energy. Most of the money coming from the energy sector is directed to the other sectors. Many of the other sectors are already very dependent on the energy sector, such as real estate and other service. Most of the sectors are very involved with the energy sector. I think the energy sector will stay for a long time as the major contributor to the economic growth, to the economy in general, and to the GDP. However, I expect over the coming 5-10 years, that other sectors will grow, especially services and real estate because of the many other projects coming up in Qatar including the 2022 World Cup and other sports and events. But, in general, those sectors will still be very much related to or dependent on the energy sector.
I think energy will remain the dominant and main source of income for the country and most of the activities will be directly related to, or involved around, the energy sector. The energy sector will remain the biggest sector in Qatar with the biggest share of GDP of the country.
What opportunities are most promising for foreign investors looking to get into the energy sector in Qatar?
AL-EMADI: I think there are many opportunities in the energy sector in Qatar and also generally in the economy. Small and medium sized industries can have huge potential for foreign investors. The investment environment in Qatar is very attractive. Taxes are very low and the tax system is very encouraging. The other incentives that the government is now providing for the industrial sector, in terms of loans and many other incentives in general, such as the regulations for labour, are all very encouraging. There is the availability of the materials and the low cost of energy. That’s also a very attractive incentive for the investors. Other sectors, such as the related real estate and infrastructure, which are linked to the energy sector, are also very attractive.
So I think there are many opportunities now. The service sector in Qatar needs to be enhanced and with this energy sector bringing in more companies, more manufacturing industries, and more investment opportunities, we need to provide more services. You know that Qatar Airways, and the aviation sector, is growing. Real Estate is growing. Those are also linked to the growth that we are seeing in the energy sector. So I think there are many opportunities in all the sectors but I think the focus can be in the downstream and the small and medium sized industries. That will be more attractive. It will be more difficult for the small investors to compete and invest in the upstream side. Most of the big multi-national companies and government companies are involved in the upstream. But I think there are many opportunities in the downstream.