New Market Research Report: Qatar Water Report Q2 2011

April 13, 2011 - PRLog -- Qatar is a small country in terms of population, but it is one of the world's largest water consumers on a per capita basis. More than half of the country's water goes to the agricultural sector, but increasing demand is coming from the country's growing urban population.

The country has limited and declining groundwater resources and the state is therefore investing heavily in desalination plants. It has one of the longest-standing desalination programmes in the Middle East and has garnered much experience in the sector.

Qatar has embarked on massive investment in its water supply infrastructure over the past two decades to meet the needs of a growing, largely urban population and those of agriculture. This has gained added momentum under the state's expansionary fiscal stance, with the 2010-2011 national budget envisaging sustained increases in infrastructure spending. The budget has allocated the largest proportion of expenditure for this sector, at 30% - around QAR 35.5bn - with sewages systems and water networks receiving priority. Overall, Qatar has budgeted QAR15bn (US$4.1bn) to spend over the next three years on electricity and water projects. With Qatar winning the bid to host the 2022 FIFA World Cup, there is now a clear focus on ensuring that centrepiece infrastructure projects, including water and power, are implemented.

In Q111 Qatar General Electricity & Water Corporation (Kahramaa) announced a major 10-year expansion plan, involving outlays of some QR69bn. The utility expects to spend QR22bn on water networks. Kahramaa is conducting two major pilot projects, the first is the installation of 8000 water meters at the West Bay and Airport areas - expected to be awarded by April 2011. If the project is proves successful, then it will be applied all over the country by 2015. The second project is for water production technology without additional power generation and is expected to be operational by the end of 2012 with a capacity of 5mn gallons per day (g/d).

With the 2022 World Cup programme set to ensure a substantial increase in infrastructure requirements over the next 10 years, calls for water production capacity will increase substantially over the near-term. We see domestic demand rising significantly over the next four years, with withdrawals rising from 285,680mn gallons in 2011 to 344,490mn gallons by 2015. However, the Qatari authorities have planned ahead and we see the Independent power and water project (IWPP) expansions keeping the supply/demand balance in equilibrium.

Investment in wastewater treatment facilities should also boost water availability over the next five years. We see treated wastewater output rising form 0.057bn cubic metres per year (m3/yr) in 2011 to 0.065 m3/yr by 2015. By 2015 a new water facility - part of a 200MW/60mn gallons per day (g/d) IWPP - is also due to come on stream.

As the Gulf economies start to revive following the recession, Qatar is in a stronger position than most to deliver on its ambitious plans to raise water production rates, since its economy was least affected by the credit downturn. Doha has a highly credible record of delivering projects on schedule, and we are confident that it will increase its water production by 9% over the next four years. By 2015, we see desalinated water production reaching 0.34mn m3/year

Production capacity of desalinated water in Qatar is expected rise from 216mn gallons a day (g/d) in 2008 to 325mn g/d by 2011 after new power and water stations become operational.

Much of the expansion in Qatar's desalination programme is being achieved through independent water and power projects (IWPPs). The largest of these is the Ras Girtas project currently under construction in the Ras Laffan industrial complex. A further IWPP is said to be under consideration, and the country is also widening its technological horizons, with a pilot reverse osmosis desalination plant due to be built and solar-powered desalination plants under consideration.

Qatar has been open to foreign investment for several years and is regarded as a relatively safe investment destination, with major international companies currently active in the sector. The US$3.9bn Ras Girtas project managed to achieve its funding goals in mid-2008, despite the already rocky state of international capital markets, indicating investor confidence. The global economic downturn has hindered the pace of development since then to some extent, but signs of improvement in the regional investment climate will benefit the sector.

Qatar will need to build on this reputation to attract more funding and technical know-how, as it will need to expand its water supply, wastewater treatment and power capacity over the next five years if output is to stay ahead of growing demand. Water demand in the summer months of 2009 rose 7% compared with the previous year.

Kahramaa remains strongly committed to private power and water, and launched a tender for a new IWPP, Facility D, in H111. With a 60mn g/d, 2GW power capacity. The project is expected to be operational by 2015, the year, forecast by the Qatari authorities, when demand will outstrip the country's existing water capacity.


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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.