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Thursday, February 02, 2023 | Daily Newspaper published by GPPC Doha, Qatar.
 Pratap John
Pratap John
Pratap John is Business Editor at Gulf Times. He has mainstream media experience of nearly 30 years in specialties such as energy, business & finance, banking, telecom and aviation, and covered many major events across the globe.
Richard Nuttall, CEO, SriLankan Airlines.
Business
SriLankan Airlines sees future prospects amid privatisation talks

Beyond the Tarmac While privatisation of SriLankan is high on the agenda of the new government in the island nation, the airline’s CEO says there is a strong future for the country’s national carrier supporting the growth of the Sri Lankan economy in general and tourism in particular. “We are open to the proposal for privatisation from the government,” Richard Nuttall, CEO, SriLankan Airlines told Gulf Times in an interview. Sri Lanka’s President Ranil Wickremesinghe earlier proposed to privatise SriLankan Airlines as part of reforms aimed at solving Sri Lanka’s worst ever financial crisis, which has led to political unrest in the island nation. “There are pros and cons to either form of ownership. We have been in dialogue with our ministry and the government over the different options for privatisation. We are now awaiting a final cabinet decision on the way forward,” Nuttall pointed out. Asked whether privatisation is the way to recover from SriLankan’s losses (the airline reportedly lost about $123mn in the fiscal year 2020-2021, and aggregate losses exceeded $1bn as of March 2021), the CEO said: “As with most airlines, we lost money during Covid-19. As such, the 2020/21 figures do not reflect future expectations. Over the last 12 months or so, the airline has been operationally profitable despite all the challenges in the country. “However, at a full profit and level, we are marginally negative. We have been affected by the fact that interest rates in Sri Lanka are now extremely high, and we are effectively paying interest on the losses of previous years. If we can use the privatisation to help us restructure or pay off some of these past debts, then we are in good shape to deliver a sustainable, profitable and growing airline to support the national economy.” Asked whether there will be any capital infusion as part of SriLankan’s restructuring plan, Nuttall said: “The airline has operated without any funding since early 2021 when we were still deep in the pandemic. We used this time to restructure costs and review our future network. In dollar terms, we have been operationally profitable for the first six months of the current financial year which started in April, and we are still hopeful of breaking even at a full profit and loss level for the year. “The challenges we have are around funding and growth. We still have outstanding debts from Covid times, and we have a number of engines in the shop for overhaul, and aircraft that are due to finish their leases. If we can privatise or find another source of funding, then we have an opportunity to grow. “We believe we should ideally be at least 50% bigger within three years to meet the needs of our current network and to deliver maximum efficiencies. If funding does not become available and we need to keep living of our cash flows as at present, then this future may take a little longer.” On SriLankan’s role in foreign exchange inflow into the island nation, as well as its role in bringing medical supplies for the country's ailing health sector, Nuttall said: “SriLankan generates the majority of its revenue from overseas markets and contributes over $700mn in foreign currency earnings to the Sri Lankan economy every year. The airline has also been a constant facilitator of tourism and foreign trade for the country regardless of the external environs and its challenges. “In fact, SriLankan remains the largest carrier of tourists into the country and collaborates frequently with stakeholders in the local industry to promote destination Sri Lanka globally.” He noted: “We played a key role during the pandemic by flying in critical medicines and vaccinations to the country when other airlines cut back flights. The airline has also spared no effort in supporting the embattled healthcare sector of the country and continues to airlift consignments of donated medicines and medical supplies free of freight charges. To date, we have carried nearly 60,000kg of international medical donations to Sri Lanka.” Nuttall also touched upon his airline’s network and said: “We monitor our network on a weekly basis. Most of the growth that we talked about comes from frequency increases, but we do have three to four new destinations that we believe will work well for us and compliment the network once we have been able to grow the fleet. “In terms of non-performing routes, we do have a couple that are struggling at present. However, we are managing to limit the losses by proactively managing capacity and we believe they will work as tourism returns.” Asked whether SriLankan intended to acquire new aircraft either for fleet replacement or expansion in mind, the CEO said: “We operated with a fleet of 27 aircraft pre-Covid-19 and made the decision to not replace some of the aircraft that left the fleet during the pandemic. More aircraft will exit the fleet next year as leases expire, but we plan to initiate a request for proposal to lease replacement aircraft in the future in support of our operational plans.”

HE the Minister of State for Energy Affairs Saad bin Sherida al-Kaabi: PICTURES: Thajudheen
Business
'Big competition' between European and Asian markets for LNG: Al-Kaabi

There is a “big competition” between European and Asian markets for liquefied natural gas, HE the Minister of State for Energy Affairs, Saad bin Sherida al-Kaabi, said and noted: “Qatar is in discussions with Asian and European markets for LNG supply.” Replying to a question by Gulf Times at a press conference at the QatarEnergy yesterday, al-Kaabi said: “Qatar is not worried about LNG markets. We are in discussions with Asian and European markets for LNG supply… very soon we will announce big contracts, whether it is Asia or Europe”. On “higher LNG prices” prompting major economies like China and India to tap cheaper forms of energy such as coal, al-Kaabi told Gulf Times. “Higher gas prices are caused by many factors. One of these is the Ukraine issue, which has made it a much bigger problem. “If you go back a little bit, it was due to everybody pushing for green and demonising oil and gas companies and there were not enough investments (in the sector). And that caused higher price, which started before the Ukraine issue. The Ukraine issue has just made it a much bigger problem. “You cannot take a short-term view of what’s happening today. Gas prices, which you see in Europe today are due to circumstances there. Majority of the contracts that India and China have, are long-term. Today, they are actually not paying a very high price in comparison to Europe. I think they are getting a very reasonable price. If you analyse the spot price (LNG), you will see it as expensive. “Coal, by the way, is also 300% higher than it used to be. And its utilisation is probably the highest that we have ever seen. Coal has double the pollution of gas.” Al-Kaabi said: “I am not worried about the markets. There are lots of markets available to us. There is a big competition now between Europeans wanting to buy and Asians wanting to buy. And we are in discussions with all…Very soon, we will announce big contracts, whether it is Asia or Europe.” Earlier addressing the event, the minister said the new LNG volumes, which Qatar will bring to the market, come at a time when natural gas assumes “greater importance” in light of recent geopolitical turmoil and amidst the dire need for cleaner energy to meet global environmental objectives. “These volumes are a welcome addition given the increasing global concern not just over energy security, but also over a pragmatic energy transition as well as fair and equitable access to cleaner energy. “In this context, we must not forget to highlight the advanced environmental characteristics of the NFE and NFS projects, including significant carbon capture and sequestration technologies and capacity, which contribute to our targets of more than 11mn tonnes per year of carbon capture and storage by 2035. “And we will continue to dedicate all efforts to power lives with cleaner energy in every corner of the world for greater economic growth and a better tomorrow for all,” HE al-Kaabi added.    

Shell CEO Ben van Beurden. PICTURE: Thajudheen
Business
Shell’s collaboration with Qatar 'very strong', says CEO Ben van Beurden

Shell’s collaboration with Qatar is “very strong”, CEO Ben van Beurden said and noted: “Qatar is a world class leader in liquefied natural gas.” He was speaking at an event at the QatarEnergy headquarters yesterday where QatarEnergy announced its selection of Shell as its second international partner in the North Field South (NFS) expansion project. NFS comprises two LNG mega trains that will have a combined capacity of 16mn tonnes per year (mtpy). It will raise Qatar’s total LNG production capacity to 126 mtpy, by 2027 from 110mn tonnes per year that will be achieved through completion of the North Field East (NFE) project in 2026. Van Beurden said: “It is very important to supply more gas to the world. The world’s transition to a zero-emission energy source will take time. Until such time fossil fuels are required. “As for natural gas, it emits far less carbon and is easy to transport to countries around the world. So, it can provide countries secure supplies of reliable energy.” Commenting on a temporary price cap on natural gas in Europe, the Shell CEO said EU politicians realise the plan is complicated. “I am sure this will settle in an appropriate and responsible way that will really benefit both markets and consumers in Europe,” he told the ceremony; adding; “Europe will have to reduce demand from industry for gas.” HE the Minister of State for Energy Affairs Saad bin Sherida al-Kaabi noted: “Shell brings great capabilities and expertise in this field. We welcome them and look forward to working with them in this project in a manner that enhances our decades-long relationship and fruitful strategic partnerships in Qatar and around the world.” Al-Kaabi also thanked CEO Ben van Beurden “for his distinguished role in advancing our partnership to an unprecedented level and for a relationship that will extend for decades.” Recently, Shell announced that van Beurden has decided to retire at the end of this year. The minister also congratulated Wael Sawan, who was present at the ceremony yesterday, for his selection as the next CEO of Shell from next year. “We wish him all the success,” al-Kaabi said.    

HE al-Kaabi and Ben van Beurden, at the agreement signing ceremony on Sunday in Doha. PICTURE: Thajudheen.
Qatar
QatarEnergy selects Shell as 2nd partner in NFS expansion

QatarEnergy has selected Shell as its second international partner in the North Field South (NFS) expansion project, which comprises two LNG mega trains that will have a combined capacity of 16mn tonnes per year (MTPY). NFS will raise Qatar’s total LNG production capacity to 126 MTPY, by 2027 from 110mn tonnes per year that will be achieved through completion of the North Field East (NFE) project in 2026. The partnership agreement was signed yesterday by HE the Minister of State for Energy Affairs Saad Sherida al-Kaabi, also the President and CEO of QatarEnergy, and Ben van Beurden, CEO of Shell, at a ceremony at QatarEnergy’s headquarters in Doha attended by senior executives from both companies. Pursuant to the agreement, Shell will have an effective net participating interest of 9.375% in the NFS project, out of a 25% interest available for international partners. QatarEnergy will hold the remaining 75% interest. The North Field Expansion Project, comprising NFS and the North Field East (NFE) expansion projects, is the industry’s largest ever LNG project. It will start production in 2026 and will add more than 48MTPY to the world’s LNG supplies by 2027. This unique project is characterised by the “highest” health, safety, and environmental standards, including carbon capture and sequestration, to reduce the project’s overall carbon footprint to the lowest levels possible. QatarEnergy’s deal with Shell is the second announcement for the NFS partnerships. “A third partnership will be announced in due course,” QatarEnergy said yesterday. In his remarks during the ceremony, Minister al-Kaabi reaffirmed Qatar Energy’s determination to continue dedicating efforts to power lives with cleaner energy in every corner of the world for greater growth and a better tomorrow for all. Al-Kaabi said: “The new LNG volumes, which Qatar will bring to the market, come at a time when natural gas assumes greater importance in light of recent geopolitical turmoil, and amidst the dire need for cleaner energy to meet global environmental objectives. These volumes are a welcome addition given the increasing global concern not just over energy security, but also over a pragmatic energy transition as well as fair and equitable access to cleaner energy.” Al-Kaabi welcomed Shell to the NFS expansion project and thanked the working teams at QatarEnergy and Shell for their excellent cooperation that led to this agreement. He also thanked van Beurden, who is retiring at the end of the year, for his “distinguished role in advancing our partnership to an unprecedented level and for a relationship that will extend for decades.” The minister also congratulated Wael Sawan, who was present at the ceremony, for his appointment as the incoming Shell CEO and wished him all the success. “I would like to thank the Qatargas leadership and project teams for their efforts in implementing the North Field expansion projects on schedule, and with an outstanding safety record. Most importantly, we are forever grateful to His Highness the Amir Sheikh Tamim bin Hamad al-Thani for his wise leadership and unlimited support of Qatar’s energy sector,” al-Kaabi concluded. ends    

Phishing is a way to extract confidential information from account holders in banks or financial institutions using illegal methods.
Qatar
Banks caution customers against scammers, cyber criminals

Local banks have cautioned customers against fraudsters who offer them prizes, including tickets for sports events in the country. The most frequently used methods by cyber criminals to lure people are email, SMS or WhatsApp messages. Industry sources said congratulatory messages are often sent to customers, offering them free match tickets or mobile phones. To claim prizes, customers are asked to disclose their personal information. Phishing is a way to extract confidential information from account holders in banks or financial institutions using illegal methods. Recently, a resident received a message claiming he has won a latest 5G mobile phone in a draw by a major merchant outlet in the country. He was also asked to send his details to a WhatsApp number provided. Many residents have received such fake messages, it is learnt. Banks have urged customers to check and ensure that email or SMS is from a legitimate source, as scammers tend to use links to collect their data or card payment information. Before making use of the one-time password (OTP), customers must ensure that the details match that of the merchant from whom the product or service has been purchased or sought. Banks have urged customers to be careful with those who pretend to help them if their card gets captured in an ATM. “Any suspicious activity may be reported to the banks immediately,” a source said. Banks have also asked customers not to hand over their card or disclose their PIN to another person under any circumstance. A telecom service provider recently alerted customers not to share their OTP, PIN or card details to anyone, even if they say they represent the company concerned. “We will not ever ask you for any sensitive information of that nature,” the telco noted. The company has also urged targeted customers to contact its fraud control unit if they receive such requests. Industry sources said nationals and residents must be careful about cyber criminals as the country is set to host the world’s most important sporting event – FIFA World Cup 2022 – within a month. “Obviously, there will be heightened business activity associated with any major global event. The country will host thousands of fans and visitors from around the world. Cyber criminals will try to exploit the situation. This happens everywhere in the world,” the source said. “Identity theft is a common form of cybercrime. A cybercriminal will find a way, often through phishing, spam emails, website or even an online pop-up survey to get access to your credit card or banking account information and may use that information to make purchases in your name,” the source added.

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Business
Pandemic seen key driver of Mideast banks' digital transformation

Almost half (48%) of banks in the Middle East say the Covid-19 pandemic is the most important driver of their organisations digital transformation strategy, according to Publicis Sapient’s latest Global Banking Benchmark Study. Almost all the Middle Eastern banks surveyed by the digital consulting company believe the increasing demand and level of customers’ use of digital channels during the pandemic will continue over the next 12 months. Banks in the Middle East are also increasingly prioritising offering new services and products to advance their customer experience transformation, once again driven by increasing competition from direct competitors and their innovative products and services. Nearly half of Middle Easter banks declare modern cloud-based systems to be their top priority for operational transformation, with almost all banks surveyed planning to modernise and upgrade their legacy IT systems to help drive their transformational strategy forward. Two thirds of banks in the Middle East cite past failures with digital investments as the biggest barrier to their organisation’s digital transformation efforts; 42% of banks believe their organisation isn’t investing enough in digital innovation efforts to keep pace with the offerings of digital-first challengers. For a third of Middle Eastern banks, growing revenue from new products and services is their main priority when it comes to their digital business transformation. Roughly a sixth of Middle East banks say the ability to fight threat posed by new market entrants (e.g., Google, Apple Amazon) is a top three transformation priority. In addition, the top three drivers behind the need for digital transformation was competition from direct competitors, digital first challengers/fintechs, and consumer tech companies, due to their innovative business models. One in five banks believe they are behind their competitors in their current approach to Digital Business Transformation, Publicis Sapient noted. Banks in the Middle East (42%) are increasingly prioritising being able to offer new services and products to help advance their customer experience transformation. Interestingly, advanced branding and marketing is a top priority for 38% of banks. Not classified as a priority for other major regions, some 28% of banks in the Middle East regard personalised, multichannel, interactive marketing as most critical to a digitally innovative bank. Some 42% of banks in the region are investing in developing new talent as an operational priority as opposed to existing talent (24%). Over a quarter of banks also believe that replacing traditional banking skill sets with new digital skills is the most critical to a digitally innovative bank. Though two thirds of banks feel under pressure to improve their ESG credentials: Nearly seven in ten banks provide ESG employee training, followed by six in ten who provide guidance on ESG risks, Publicis Sapient’s study reveals.    

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Business
Qatar hospitality market may grow by 89% to 56,000+ hotel keys by 2025: Knight Frank

Qatar could see its hospitality market grow by 89% to over 56,000 hotel keys by 2025, according to research carried out by global property consultancy firm, Knight Frank, with the delivery of the planned hotel room supply forecast to cost approximately $7bn. Knight Frank says tourist arrivals are recovering as the authorities are scaling back Covid-linked travel restrictions, with arrivals from the GCC states already starting to exceed pre-pandemic levels. That said, visitors from India, which has historically been the biggest source of inbound arrivals are still about a third lower than they were in 2019, the report said. Adam Stewart, partner and head of Qatar, Knight Frank, said: “Officially, around 30,000 keys had been delivered by the end of 2021, and we estimate that another 3,800 keys will have been delivered by the time the World Cup commences next month. In addition, Qatar’s hotel capacity will be temporarily boosted by an additional 3,900 cabins in two luxury cruise ships moored off the coast; and a third is being planned. In addition, cabin-style rooms across seven fan villages, designed to house the 1mn fans expected to descend on the State during the World Cup are also being rapidly assembled. “Looking beyond the World Cup, however, reveals some incredible ambitions. The tourism and hospitality sector is expected to contribute 12% of GDP by 2030, making it worth about $55bn, by which time tourist arrivals are forecast to be closing in on 7mn.” Faisal Durrani, partner and head of Middle East Research, Knight Frank, added: “While there is palpable excitement in Doha as the FIFA World Cup draws near, for the country’s hospitality sector the best is yet to come. Indeed, with nearly 27,000 hotel keys expected to be delivered in the next three years, there will be a phenomenal change in Qatar’s hotel offering by the end of 2025. The near doubling in capacity to over 56,000 rooms will be in a post-World Cup environment and comes as the country prepares for an anticipated visitor influx following heightened interest in Qatar once the excitement of the World Cup subsides. “Indeed, with new theme park attractions planned in Lusail such as the new Winter Wonderland and Aquatar on Qetaifan Island, which promises to deliver the world’s tallest waterslide, the seeds of a vibrant tourism and hospitality market are starting to take shape.” Stewart highlighted, “Interestingly, by the end of 2025, international hoteliers will control 62% of Qatar’s hotel keys, up from 59% today. In reality this could be even higher as 17% of rooms are yet to be allocated to an operator.” Turab Saleem, partner and head (Hospitality, Tourism and Leisure) said, “Like other markets in the region, the focus is very much on the higher end of the price spectrum. Just 14% of the expected hotel keys are in the 3 star and lower category; however, this is the segment that could present the greatest opportunity to transform Qatar’s appeal to a wider audience, particularly in the wake of the World Cup which will put the country in the global spotlight”. Knight Frank’s analysis shows that 76% of planned rooms will be classed as either 4- or 5 stars. Today, 69% of Qatar’s hotel rooms fall into this category. “One consideration for operators will be to actively target tourists looking for affordable, or budget-holidays, perhaps through the provision of all-inclusive packages which are already very popular in markets such as Spain, Greece, Turkey and the Caribbean”, Durrani concluded.    

The global aviation industry has committed to achieving net-zero carbon emissions by 2050. The resolution aligns with the Paris agreement to limit global warming to 1.5C. But fresh investments totalling billions of dollars are required to get there, which the global body of airlines says is an u201cenormous undertakingu201d
Business
Net-zero by 2050 ‘enormous undertaking’ for global aviation

Beyond the Tarmac The global aviation industry has committed to achieving net-zero carbon emissions by 2050. The resolution aligns with the Paris agreement to limit global warming to 1.5C. But fresh investments totalling billions of dollars are required to get there, which the global body of airlines says is an “enormous undertaking”. The new industry target will take a combination of sustainable aviation fuels (SAF), radical airframe designs, cutting edge propulsion methods, efficiency gains, carbon capture technology, and offsetting, IATA says. Certainly, it is an enormous task given that projections suggest 2050 demand will be in excess of 10bn passengers per year. If the industry carried on flying as it is today — a business-as-usual approach — by 2050 it would have emitted approximately 21.2 gigatonnes of CO2. SAF can reduce CO2 emissions 80% or more. They are produced from a number of sources (feedstock) including waste oil and fats, green and municipal waste and non-food crops. They can even be produced synthetically via a process that captures carbon directly from the air. Crucially, SAF feedstock does not compete with food crops or water supplies, nor contribute to forest degradation. By 2025, it is estimated that there will be 11 technical pathways to producing SAF. And by 2050, SAF could contribute about 65% of emissions reduction needed. A massive increase in production will be required though, IATA noted. The largest acceleration is expected in the 2030s as policy support becomes global, SAF becomes competitive with fossil kerosene, and credible offsets become scarcer. The industry plan for net-zero carbon emissions foresees a rapid decline in the use of offsets as in-sector solutions take over. But offsetting mechanisms, including carbon capture technologies, will be vital in the next decade or so and continue to be integral to achieving the overall industry target. The Carbon Offsetting Reduction Scheme for International Aviation (CORSIA) is the main pillar. CORSIA aims to stabilise aviation’s net CO2 emissions at 2019 levels from 2021 onwards and will be implemented in phases. Until 2026, only flights between countries that volunteer to participate in CORSIA will be subject to offsetting requirements. From 2027, virtually all international flights will be subject to mandatory offsetting requirements, covering more than 90% of all international aviation activity. Exceptions include developing countries and small island states. The criteria for offsetting measures are being closely scrutinised. Forestry and natural climate solutions are already available. Some 15-20% of the world’s greenhouse gas emissions come from deforestation but there are challenges in reversing this trend. Reforestation and protection must be permanent, and the needs of indigenous communities must be considered, for example. Offsetting measures on the horizon include direct air capture (DAC), which removes CO2 directly from the atmosphere. It is estimated that up to 30,000 large DAC facilities would capture some 30 gigatonnes of CO2 per year. Carbon capture utilisation and storage (CCUS) is a technology that can capture up to 90% of the CO2 emissions produced from the use of fossil fuels in electricity generation and industrial processes. Already, operational and infrastructure efficiencies have resulted in a 55% improvement in fuel burn per passenger kilometre since 1990. Retrofitting winglets enables airlines to save more than 4% in fuel, and reduce aircraft noise and NOx emissions, for example. Over 9,000 aircraft have been retrofitted, saving over 100mn tonnes of CO2 since 2000. The overall fuel efficiency of the industry fleet is about 80% better than 50 years ago, IATA noted. Geared turbofan engines and further advances in design will drive a further 15-25% fuel efficiency improvements over the next two decades. But from the mid-2030s, radical new propulsion technologies and advanced designs promise even greater benefits. The first step is likely to be hybrid-electric concepts. When combined with a new airframe body, such as a blended wing, CO2 reductions of up to 40% are possible. Smaller, fully electric aircraft could also appear around this time, IATA points out. Norway has the goal of operating all domestic and short-haul flights electrically by 2040. Electric flights would completely eliminate CO2 emissions. Experts says hydrogen is another possibility. It is lighter than jet fuel but takes up much more space. Much larger tanks and fundamental changes in the aircraft fuel system are therefore needed. Entry into service is envisaged around 2035. New airframe designs will need to be developed to realise the potential of new propulsion methods. A canard wing has the main wing being set further back behind small forewings. These could be in production from 2035-2040. A blended wing uses the entire plane to generate lift, enabling huge fuel savings. Strut or truss-braced wings would enable larger more efficient engines to be used, such as open rotors. Both Airbus and Boeing are working on radical new designs as are other airframe manufacturers. IATA said it is strongly encouraged by the adoption of a Long Term Aspirational Goal (LTAG) to achieve net-zero CO2 emissions by 2050 at the recent 41st Assembly of the International Civil Aviation Organisation (ICAO). IATA’s Director General Willie Walsh said: “The aviation industry’s commitment to achieve net-zero CO2 emissions by 2050 requires supportive government policies. Now that governments and industry are both focused on net zero by 2050, we expect much stronger policy initiatives in key areas of decarbonisation such as incentivising the production capacity of Sustainable Aviation Fuels (SAF). “And the global determination to decarbonise aviation that underpins this agreement must follow the delegates home and lead to practical policy actions enabling all states to support the industry in the rapid progress that it is determined to make.”

HE the Minister of State for Energy Affairs, Saad bin Sherida al-Kaabi addressing a media event at Al Kharsaah Tuesday
Business
Ras Laffan, Mesaieed solar plants to add 800MW to national grid by 2024: Al-Kaabi

Another 800MW will be added to Qatar’s national grid with the completion of two more solar plants being set up at Ras Laffan and Mesaieed by QatarEnergy, said HE the Minister of State for Energy Affairs, Saad bin Sherida al-Kaabi. The solar plants at Ras Laffan and Mesaieed will be inaugurated in 2024, al-Kaabi told a media event at Al Kharsaah Tuesday. The minister said the Al Kharsaah project represents a milestone in Qatar’s energy history and is set to meet 10% of its peak electricity demand at full capacity and reduce CO2 emissions by 26mn metric tonnes over its lifespan. It is also a major step towards Qatar’s goal of achieving production of 5GW of solar power by 2035. Al Kharsaah Solar PV Independent Power Producer (IPP) Project is the country’s first large-scale solar power plant and is set to significantly reduce the environmental footprint. The Al Kharsaah Solar PV Power Plant is owned by a joint venture between affiliates of QatarEnergy Renewable Solutions (60%), Marubeni (20.4%) and TotalEnergies (19.6%). “The site of Al Kharsaah was chosen following extensive scientific studies to determine the sites with the best possible operational efficiency and maximum economic value, placing great consideration to the geological, environmental, and social impacts of establishing this station,” HE al-Kaabi said. Building the plant, HE al-Kaabi said, comes as part of implementing QatarEnergy’s updated Sustainability Strategy, which reemphasises its commitment, as a major energy producer, to the responsible production of clean and affordable energy to facilitate the energy transition. In addition to increasing solar capacity to over 5GW, the strategy targets reducing greenhouse gas emissions, and deploying carbon capture and storage technology to capture over 11mn tonnes per year of CO2 in Qatar by 2035. It also aims to further reduce the carbon intensity of LNG facilities bolstering Qatar’s commitment to responsibly supply cleaner LNG at scale in support of the energy transition In reply to a question on Qatar’s LNG contracts and cargoes, HE al-Kaabi said, "Qatar is absolutely committed to the sanctity of contracts. To us, this is something that is absolutely fundamental to doing business. This is how we have done business in the past…and this is how we will be doing our business in future. “So when we sign with an Asian buyer or European buyers, we stick to that agreement. And that is why for more than 27 years, we have not missed a single cargo of LNG and are trusted by our partners and buyers around the world. "So the volume that will go to Europe is what has been assigned. As far as taking from Asian buyers to take to Europe (that) will not happen." He also said QatarEnergy aims to become the world's biggest LNG trader through organic growth and is already building trading teams, HE al-Kaabi said. "We are just going to keep building that organically. So we are not looking at acquiring a company or anything like that,” HE al-Kaabi noted.

Patrick Pouyannu00e9, chairman and CEO of TotalEnergies.
Business
Al Kharsaah project ‘milestone’ in TotalEnergy’s relationship with QatarEnergy: Pouyanné

The Al Kharsaah solar project demonstrates once again TotalEnergies' ability to support producing countries in their energy transition by combining natural gas production and solar energy to meet the growing demand for electricity”, said Patrick Pouyanné, chairman and chief executive officer of TotalEnergies. “After our recent entry in the giant LNG projects NFE and NFS alongside QatarEnergy, we are proud to announce today the start-up of the Al Kharsaah solar plant. This giant project, which contributed to the sustainability roadmap of Qatar, demonstrates once again TotalEnergies' ability to support producing countries in their energy transition by combining natural gas production and solar energy to meet the growing demand for electricity”, Pouyanné said. “This is another milestone in our long-standing and trustful relationship with QatarEnergy, also bringing us closer to our goal of 35GW of production capacity by 2025,” the TotalEnergies chairman said. Earlier, HE the Minister of State for Energy Affairs, Saad bin Sherida al-Kaabi said, "Total is a very important company for our partnership here," Internationally, we are in many places together, in exploration and you'll see us soon going into more areas together."

A general view of the 800MW-peak solar plant in Al Kharsaah. PICTURES: Thajudheen
Business
QatarEnergy reserves land for Al Kharsaah solar plant expansion: Energy Minister

QatarEnergy has reserved land for future expansion of the 800MW-peak solar plant in Al Kharsaah, said HE the Minister of State for Energy Affairs, Saad bin Sherida al-Kaabi. “The area around Al Kharsaah has actually been reserved for expansion. We do have expansion capability. There is a lot of land around Al Kharsaah for possible expansion,” HE al-Kaabi told Gulf Times Tuesday. “We believe solar technology will actually become more efficient and cheaper with time. And may be the most important element for us is to try and reduce the size of the land that we need (for such projects). Qatar has scarcity of land… and we are a very small country. And you can see this (Al Kharsaah) is a giant project as far as the land is concerned. I think with time the requirement for land will shrink. “Regarding wind, we actually started a project in 2008 as part of exploring renewable options. In Qatar, we don’t have a steady flow of wind. To have a sustainable solution for electricity, we should have consistent velocity of wind over a specific period of time. So, wind does not work in Qatar and we are not looking at that,”HE al-Kaabi explained. PICTURES: Thajudheen The minister highlighted some of Qatar’s efforts towards achieving its sustainability targets, stressing that the “Al Kharsaah plant is one of the country's strategic initiatives to build projects that contribute to reducing gas and thermal emissions, thus achieving about a million-tonne reduction in annual carbon dioxide emissions.” The Al Kharsaah Solar PV Power Plant is owned by a joint venture between affiliates of QatarEnergy Renewable Solutions (60%), Marubeni (20.4%) and TotalEnergies (19.6%). QatarEnergy Renewable Solutions is QatarEnergy’s investment arm specialising in renewable and sustainable energy investments and projects. QatarEnergy is consolidating its position in the renewables business and is delivering amid-term target of generating 5GW of solar power by 2035 as part of its Sustainability Strategy.

Gulf Times
Qatar
Amir inaugurates 800MW Al Kharsaah Solar Plant

Qatar’s first and one the region’s largest solar plants was inaugurated by HH the Amir, Sheikh Tamim bin Hamad al-Thani at Al Kharsaah Tuesday. The multi-billion dollar 800MW Al Kharsaah Solar PV Power Plant (KSPP) was constructed on a 10 square kilometer land area and can provide the national grid with about 10% of peak electricity demand. KSPP includes more than 1,800,000 solar panels that utilise sun tracking technology to follow the movement of the sun to ensure the most efficient use of land and to maximise daily production. It utilises robotic arms and treated water to clean the solar panels at night in order to enhance the plant's production efficiency. The Al Kharsaah Solar PV Power Plant is owned by a joint venture between affiliates of QatarEnergy Renewable Solutions (60%), Marubeni (20.4%) and TotalEnergies (19.6%). The plant inauguration ceremony at Al Kharsaah was attended by HE the Prime Minister and Minister of Interior, Sheikh Khalid bin Khalifa al-Thani and HE the Minister of State for Energy Affairs, Saad Sherida al-Kaabi among other dignitaries. Speaking at the inauguration ceremony, al-Kaabi highlighted some of Qatar’s efforts towards achieving its sustainability targets. “Al Kharsaah plant is one of the country's strategic initiatives to build projects that contribute to reducing gas and thermal emissions, thus achieving about a million-ton reduction in annual carbon dioxide emissions,” al-Kaabi stressed. Al-Kaabi highlighted some of the environmental efforts and sustainability requirements that were taken into account in building this landmark plant, saying, “The site of Al Kharsaah was chosen following extensive scientific studies to determine the sites with the best possible operational efficiency and maximum economic value, placing great consideration to the geological, environmental, and social impacts of establishing this station.” Al-Kaabi thanked QatarEnergy’s partners in the project, namely, Japan’s Marubeni, France’s TotalEnergies, as well as the project’s contractors for their efforts to deliver this project. The minister also expressed his thanks and appreciation to QatarEnergy, Qatar Electricity and Water Company, and the President, management, and employees of Kahramaa for their continuous efforts to meet the country’s electricity and water needs with the highest standards. "I am honoured to present ample thanks and gratitude to His Highness the Amir, Sheikh Tamim bin Hamad al-Thani, for his unlimited support and wise guidance, without which we would not have accomplished such a project,” al-Kaabi added. KSPP started supplying electrical power to Qatar’s electricity grid last June, marking the startup of the 400 MW first phase of the 800 MW plant. Full capacity was reached by the end of the second phase. The KSPP can provide the national grid with about 10% of peak electricity demand. Building this plant comes as part of implementing QatarEnergy’s updated Sustainability Strategy, which re-emphasises its commitment, as a major energy producer, to the responsible production of clean and affordable energy to facilitate the energy transition. In addition to increasing solar capacity to over 5GW, the strategy targets reducing greenhouse gas emissions, and deploying carbon capture and storage technology to capture over 11mn tons per year of CO2 in Qatar by 2035. It also aims to further reduce the carbon intensity of LNG facilities bolstering Qatar’s commitment to responsibly supply cleaner LNG at scale in support of the energy transition.

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Business
Qatar inflation rates expected to gradually ease over coming months: Oxford Economics

Qatar inflation rates are expected to gradually ease over the coming months; Oxford Economics said and noted the country’s inflation will fall to 2.1% in 2023 from 4.3% this year. In its latest update, Oxford Economics said: “In Qatar, rental and recreation and culture costs pushed inflation up to 6%, the highest since December 2021 and more than we expected, following a slower rise the previous two months.” Oxford Economics has made an upward revision of its forecast of Qatar's fiscal balance. The researcher now says Qatar's fiscal balance has been forecast at 9% of GDP this year and 9.3% in 2023. Similarly, the country’s current account surplus, according to Oxford Economics, will be upwardly revised to 16.8% of its GDP this year and 14.9% in 2023. Qatar’s real GDP growth has been forecast at 3.6% this year and 3.5% in 2023. According to Oxford Economics, the “IMF expects Mena region to sidestep global gloom and the fund retained its optimistic view on Mena, lifting 2022 and 2023 GDP growth projections a tad in its latest outlook, to 5% and 3.6%, respectively, and echoing our expectations of the region's continued outperformance next year.” That said, we think the worsening global backdrop will limit growth in Mena to 3.2% in 2023, with a sharp deceleration in some GCC countries given the decision by Opec+ to cut oil production quotas. Inflation data for September showed prices rising in Egypt, Qatar, Saudi Arabia, and Tunisia, while staying stable in Jordan. Tunisia's central bank tightened policy as price pressures persist, and we expect Egypt to follow suit and raise rates by at least another 100bps before year-end. Moody's upgraded the outlook on Oman's Ba3 sovereign credit rating to positive, reflecting improvement in public debt metrics. “We see the government maintaining a budget surplus this year and next, and for the debt-to-GDP ratio to drop to around 45% in 2023, from 63.6% in 2021,” Oxford Economics noted.

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Business
800MW Al Kharsaah solar plant inauguration on October 18

Qatar is set to cross a major milestone when the 800MW Al Kharsaah solar plant will be inaugurated at a high-profile event on October 18. The project represents a milestone in Qatar’s energy history and it set to meet 10% of its peak electricity demand at full capacity and reduce CO2 emissions by 26mn metric tonnes over its lifespan. It is also a major step towards Qatar’s goal of achieving production of 5GW of solar power by 2035, QatarEnergy had said earlier. Al Kharsaah Solar PV Independent Power Producer (IPP) Project is the country’s first large-scale solar power plant and is set to significantly reduce the environmental footprint. The project is owned and operated by Siraj 1 SPV, a consortium jointly owned by TotalEnergies & Marubeni (40%) and Siraj Energy (60%), the latter being a joint venture between QatarEnergy and QEWC (Qatar Electricity and Water Company). Set to become the world’s largest solar power plant equipped with high-efficiency, half-cut bifacial solar modules, the 800MWp Al Kharsaah Solar PV IPP Project will cover 10 square kilometres (the equivalent of roughly 1,400 soccer fields) and will feature 2mn modules mounted on trackers. This will enable substantial power gains by taking full advantage of the region’s exceptional sunshine. In addition, the use of 3,240 installed string inverters will further increase annual yield by allowing for better tracking of the maximum power point at the string level. The plant will also feature a semi-automated cleaning system for the solar modules that cleans the dust and sand off every single module once every four days. In terms of power generation, the Al Kharsaah plant has a full capacity of 800MWp that will be built in two phases of 400MWp each. During its first year of operation (P50 Year 1), it is expected to generate almost 2,000,000MWh, the equivalent energy consumption of approximately 55,000 Qatari households. According to the International Energy Agency’s Sustainable Development Scenario, renewable energies will represent more than 35% of the world’s energy mix in 2040. In London recently, HE the Minister of State for Energy Affairs, Saad bin Sherida al-Kaabi highlighted Qatar’s role in reducing gas emissions and carbon footprint and cited the inauguration of the Al Kharsaah solar power station.

Cargo is unloaded from a Korean Air Lines Co freight plane arriving from China at the company's cargo terminal at Incheon International Airport in South Korea. Shipping by air is a fast and efficient means of transport for goods. Airlines transport in excess of 52mn metric tonnes of goods a year, representing more than 35% of global trade by value but less than 1% of world trade by volume, according to IATA, the global body of airlines.
Business
Air cargo demonstrates resilience amid mixed market signals

Shipping by air is a fast and efficient means of transport for goods. Airlines transport in excess of 52mn metric tonnes of goods a year, representing more than 35% of global trade by value but less than 1% of world trade by volume, according to IATA, the global body of airlines. That is equivalent to $6.8tn worth of goods annually, or $18.6bn worth of goods every day. However, the effects of Covid-19 on the industry dramatically affected the air industry including air cargo. Available cargo tonne-kilometres fell industry-wide by 21.4% year-on-year in 2020. However, by the end of the year, industry-wide cargo tonne-kilometres had returned to near pre-Covid values. In 2021, air cargo generated $155bn, up from $129bn in 2020 and $101bn in 2019. Air cargo therefore contributed more than a third of airline revenues in 2021, over double its contribution in 2020. Recent data for global air cargo markets demonstrated the industry’s resilience amid economic uncertainties, IATA noted. Global demand, measured in cargo tonne-kilometres (CTKs), fell 8.3% compared to August 2021 (-9.3% for international operations). This was a slight improvement on the year-on-year decline of 9.7% seen in July. Capacity was 6.3% above August 2021 (+6.1% for international operations). This is a significant expansion over the 3.6% year-on-year increase in July. Global goods trade expanded slightly in August this year and the additional easing of Covid-19 restrictions in China will positively impact cargo markets. While maritime will be the main beneficiary, air cargo will receive a boost from these developments. Also, inflation levels in G7 countries slowed for the first time since November 2020. Oil prices stabilised in August and the jet fuel crack spread fell from a peak in June. New export orders, a leading indicator of cargo demand and world trade, decreased in leading economies in all regions except the US. That said, global supply chain congestion is contributing to an inflationary environment and causing challenges for air cargo. Air cargo crews still face hardships navigating Covid-19 restrictions in many countries, and operations are being adversely affected by shortages of human resources and facilities. Air cargo is the backbone of global supply chains. The efficiencies and advantages of transporting goods by air were highlighted during the Covid-19 pandemic, with the delivery of life-saving personal protective equipment, medical supplies, and vaccines. The passenger side of the air transport business, conversely, dimmed as countries closed their borders and added to their travel restrictions. Air cargo revenues have nevertheless been the bright story for airlines during the pandemic. They rose nearly 75% in 2021 compared with 2019 on the back of strong demand and record cargo yields. That, however, was far from enough to offset the fall in passenger revenues, which in 2021 were still more than 60% under their 2019 level. This left overall airlines revenues in 2021 fully 57% below revenues for 2019. Amid greatly diminished international passenger traffic, particularly as the pandemic took full effect, passenger aircraft belly capacity declined substantially. To compensate, airlines temporarily converted some of their passenger aircraft to freighters, which are dubbed “preighters”. The result was record air cargo load factors and yields. The air cargo load factor hit a peak in mid-2021 before falling as a result of lower demand and increased capacity. Air cargo yields also fell in the second half of 2021 until Omicron, labour shortages, and other disruptions sent them to new heights at the outset of 2022. IATA’s director general Willie Walsh said: “Air cargo continues to demonstrate resilience. Cargo volumes, while tracking below the exceptional performance of 2021, have been relatively stable in the face of economic uncertainties and geopolitical conflicts. Market signals remain mixed. “August presented several indicators with upside potential: oil prices stabilised, inflation slowed and there was a slight expansion in goods traded globally. But the decrease in new export orders in all markets except the US tells us that developments in the months ahead will need to be watched carefully.” Pratap John is Business Editor at Gulf Times. Twitter handle: @PratapJohn    

HE Abdullah bin Hamad al-Attiyah handing over the award to Fahad Hamad al-Mohannadi, who got the award for ,The advancement of Qatar's energy industry., PICTURE: Ram Chand
Business
Six veterans recognised at Abdullah Bin Hamad Al-Attiyah International Energy Awards for Lifetime Achievement

* Former US secretary of state, Rex Tillerson, among the winner * Former managing director of QEWC Fahad Hamad al-Mohannadi gets award for advancement of Qatar’s energy industry Former United States’ secretary of state, Rex Tillerson, was among the winners at the ‘Abdullah Bin Hamad Al-Attiyah International Energy Awards for Lifetime Achievement’, which were distributed at a high-profile event in Doha on Wednesday night. More than 200 dignitaries attended the prestigious event where six exceptional individuals were recognised for lifetime achievements in their fields of work and policy. The individuals recognised for their exemplary careers in the energy industry included Charif Souki, Executive Chairman of the Board of Tellurian, who collected the Advancement of Natural Gas prize; Alexander Kemp, Professor of Petroleum Economics and Director at the University of Aberdeen, who picked up the Advancement of Education for Future Energy Leaders gong; Professor Martin Green, Scientia Professor at the University of New South Wales, who won the Advancement of Renewables award; and John Kingston, Director of Global Market Insights for S&P Global, who was recognised with the Advancement of Energy Journalism accolade. The Advancement of Qatar’s Energy Industry and the Advancement of International Energy Policy and Diplomacy awards were collected by Fahad Hamad al-Mohannadi, former managing director of QEWC, and Tillerson, the former chairman and chief executive officer of Exxon Mobil Corporation. To ensure only the worthiest industry leaders receive the prestigious Lifetime Achievement award, in the months before the event the Al-Attiyah Foundation creates an International Selection Committee to submit a list of outstanding candidates. The committee independently scores every nominee in the six award categories for their performance based on criteria such as impact, leadership and partnership, innovative and creative thinking, and long-term vision. This year’s committee comprised of previous winners of the award, and they cast their votes in their respective fields. At the gala dinner, HE Abdullah bin Hamad al-Attiyah said: “The Abdullah bin Hamad Al-Attiyah International Energy Awards for Lifetime Achievement has always been one of the highlights of the year. It gives me great pleasure to recognise exceptional and talented individuals for their contributions to the energy industry. “It is with a sense of satisfaction that we now induct our winners into the Alumni of the Abdullah bin Hamad Al-Attiyah International Energy Awards for Lifetime Achievement, whom we fondly regard as accomplished Energy Elders. Together with our energy elders, the Al-Attiyah Foundation and its members will continue to plot and chart the journey to a world powered by sustainable energy,” al-Attiyah added. The Abdullah Bin Hamad Al-Attiyah International Energy Awards celebrates the legacy of HE al-Attiyah by honouring individuals for their lifetime achievements in the fields of work and policy that emulate al-Attiyah’s 40 years of distinguished contributions to the global energy industry. The nominees are recognised for outstanding records of accomplishment in their sector over the span of their careers, acknowledging individuals who have made an exceptional impact on the energy industry with distinct personal achievements for a consistent and prolonged period.    

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Dollar strength and more financial pressures on other currencies seen: Oxford Economics

Oxford Economics sees more dollar strength and more financial pressures on other currencies, which is due in part to timely policy tightening by emerging markets (EM) and, consequently, lower interest rate differentials. Some advanced economies (AE) currency weakness is certainly due to idiosyncratic risks, from the Ukraine war that put the euro and all European currencies under pressure, to the ensuing gas crisis and European fiscal policy responses to it, which placed the British pound under stress last month. September's sterling weakness raised the issue of BoE foreign reserve adequacy, a rare discussion for a reserve currency and almost certainly unfounded. Low AE foreign currency reserves are a norm, but the privilege, it ought not to be forgotten, rests on prudent macroeconomic policy. Fundamentals, moreover, do not point to structural changes in support of dollar strength. While interest rate differentials give muscle to the dollar, the widening US current account deficit and cross-border financial outflows speak in favour of a weaker greenback. Should Europe see further inflationary pressures and fight back with forceful fiscal measures, stronger policy tightening may be necessary down the road, widening the policy rate differential and complicating the risk assessment. That eventually would bring an end to the strong dollar, but would likely lead to greater financial upheavals before that were to happen. Should uncertainty abate or become manageable (whether because of the Ukraine crisis entering a calmer phase, which seems unlikely, or by the European gas crisis being resolved sooner than expected, also unlikely albeit less so), there is reason to believe that the fiscal push in Europe could provide tailwinds for European currencies. “Until that happens, though, we're looking at more dollar strength and more financial pressures on everybody else.” When considered in a global context, EM currencies are holding up well against the dollar, some due to terms-of-trade improvements, some due to tighter policy or lack of proximity to the European crisis. AEs, on the other hand, though traditionally less sensitive to dollar strength, are now facing a slew of financial pressures – on their currencies, their bond yields, and even their sovereign debt sustainability. “On balance, while interest rate differentials support the strong dollar, global financial flows do not. In the short run, more instability in Europe – especially higher energy prices and aggressive fiscal packages that fight it – may ensure the dollar maintains its recent strength and even appreciates further,” Oxford Economics said.

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Business
Opec+ decision on production cut to tighten market further: Emirates NBD

The decision by Opec+ to cut production by 2mn barrels per day (bpd) from its August baseline levels will tighten the market further, according to Emirates NBD. Opec+ does have some merit in trying to anticipate a period of slower growth in oil demand, the regional banking group said in a report. “Risks to oil demand growth are skewed to the negative as economies respond to substantially tighter monetary policy, high inflation, and slower economic activity. While a total collapse like the market endured in 2020 is highly unlikely, a considerable slowdown in the pace of demand growth looks set for next year, though total demand probably won’t shrink,” noted Edward Bell, senior director (Market Economics) at Emirates NBD. However, he said, there is a risk of demand outperforming should China adjust its zero-Covid strategy and activity bounce back sharply from its current doldrums. Cutting production also worsens an already fraught supply picture. Opec+ has been missing targets in aggregate thanks to underperformance by several members, Russia faces a shrinking list of destinations for its exports thanks to sanctions, and investment outside of the Opec+ grouping has been lagging, keeping production from countries like the US at an effective standstill. At the same time, global inventories have been drained as governments responded to high oil prices by releasing strategic reserves: Total US crude oil inventories have plummeted as Strategic Petroleum Reserve (SPR) stocks have been released. By sticking to August baseline levels, the 2mn bpd targeted cuts will be watered down considerably. Of the 19 members of Opec+ that have been participating in production targets (Mexico is included but has not participated), Emirates NBD estimates only seven will actually need to cut production from November onward if using August targets as their baseline. Most members of Opec+ currently have production targets higher than their recent output so will not need to cut. All of the actual cuts will come from producers in the Middle East and Africa with Saudi Arabia, the UAE, Kuwait and Iraq required to make the largest adjustments to hit their target level. Market response to the cuts was relatively mild given that they had been expected and the headline cut was immediately neutralised by sticking to old baselines that don’t reflect existing oil market realities, the report noted. Brent futures have bounced by about 11% since hitting a recent low of $84/b, pushing back up above $90/b, while WTI has also recovered, moving further away from the high $70s handle it had hit recently and closing in on $90/b in response to the Opec+ decision. “We had outlined previously how markets face a strained supply picture and that oil prices will likely push higher going into 2023 and are holding to that view for now,” Emirates NBD noted. Importing nations may choose to respond by releasing more of their strategic reserves with the US administration responding to the cuts immediately by saying they were “disappointed by the shortsighted” decision and that the president will continue to “direct SPR releases as appropriate.” However, further legislative responses — the oft threatened No Oil Producing and Exporting Cartels Act (NOPEC bill) in the US for instance — are unlikely to be effective in prompting more oil from the Opec+ alliance. Draining inventories more may actually keep the market even more anxious and prompt an even bigger bid under near-term oil, steeping out the backwardation in markets, the report noted.