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Qatargas

Laffan Refinery 2

Officials in Qatar this morning are celebrating the opening of a new refinery in Ras Laffan that will boost the country’s ability to process natural gas.

The $1.5 billion Laffan Refinery 2 (LR2) processes some 146,000 barrels per day of condensate from the North Field. This is the single largest natural gas reserve in the world.

This effectively doubles capacity when working in tandem with LR1, which has been operating since 2009.

QNA

Emir Sheikh Tamim bin Hamad Al Thani

Production at the new plant actually began in December. But the refinery is being formally inaugurated by Qatar’s Emir today during an event at the Qatar National Convention Center.

Diversification

In a statement last year, Saad Sherida al Kaabi, Qatar Petroleum President and CEO, and Chairman of Qatargas Board of Directors, said:

“The expansion of the existing capacity has been implemented within the framework of an integrated plan to develop the oil and gas industry in Qatar and to diversify the utilization of natural resources as well as to meet current and future needs of the domestic market of high-quality petroleum products.”

According to operator Qatargas, the LR2 has a daily production capacity of 60,000 barrels of naphtha. It can also produce 53,000 barrels of jet fuel, 24,000 barrels of gasoil and 9,000 barrels of liquefied petroleum gas (LPG) a day.

LR2’s shareholders are Qatar Petroleum (84 percent), Total (10 percent), Cosmo (2 percent), Idemitsu (2 percent), Mitsui (1 percent) and Marubeni (1 percent).

Thoughts?

Damon McDonald/Flickr

Lusail’s Twin Towers

Several unique-looking buildings are coming up in Qatar over the next few years at the sprawling Lusail City.

The under-construction site north of Doha aims to eventually house 200,000 residents on four purpose-built islands and in 19 multi-purpose districts.

One recently completed project is a set of new 32-story office buildings called the Marina Twin Towers.

Gold Bay Real Estate

The Marina Twin Towers in Lusail

The cubes in the new colorful buildings are deliberately stacked unevenly for visual effect, and are in some ways reminiscent of Qatar’s Zig Zag Towers near Lagoona Mall.

According to agents Gold Bay, the towers were inspired by “the traditional architectural design in Qatar, the cube.”

It added that the different colors reflect “the mixture of civilizations in the State of Qatar.”

Other projects

On its website, Gold Bay also lists two other upcoming buildings in Lusail:

The first is Mansour Gate, a $294 million development that’s to be built in Lusail’s Energy City, which will headquarter international oil and gas firms.

Gold Bay Real Estate

Al Mansour Gate

When completed, Al Mansour Gate will spread over an area of 35,000 square meters and include a compound of four commercial offices and retail buildings, as well as an independent boutique hotel.

There’s also Cubes Tower.

This upcoming 22-floor waterfront residential building is set to be located northeast of Lusail’s Fox Hills neighborhood.

Gold Bay Real Estate

Lusail Cubes Tower

The property contains seven luxury apartments on each floor, and penthouses on the top two floors.

All three buildings – Marina Twin Towers, Al Mansour Gate and Cubes Tower – have been designed by Lebanese firm E Square Architects.

Another building that’s been generating some buzz is the distinctive crossed-swords Katara Towers.

Kling Consult

The Katara Towers at Lusail

Situated in Marina City, the luxury hotel will include apartments, restaurants and entertainment and recreational facilities.

It was originally expected to be built by 2016, but the opening has now been pushed back to 2020, according to Katara Hospitality’s website.

Lusail’s development

Lusail City was first conceived over a decade ago, but work on it has been slow, with some real estate experts attributing delays to lukewarm demand.

Still, construction is ramping up as the city prepares to host the opening and closing games of the 2022 World Cup.

Qatar 2022 Bid Committee

Lusail Stadium rendering, as submitted by Qatar during bid process.

Contractors for the stadium were appointed in November. And the official design is expected to be revealed early this year.

The project is slated to be completed by 2020.

Thoughts?

Quinn Dombrowski/Flickr

Photo for illustrative purposes only.

A draft law governing new “selective” taxes has been approved by Qatar’s Cabinet and could be implemented as early as April this year.

According to QNA, the tax will be “imposed on goods harmful to human health and the environment,” as well as specific luxury items.

Officials in Doha had first warned of the upcoming sin taxes last June, but said they would apply to tobacco, fast foods, and soft drinks.

JT/ Flickr

Photo for illustrative purposes only.

It is unclear what a selective tax related to the environment or luxury goods would look like.

QNA added that Qatar’s law was prepared in accordance with a unified GCC agreement. It did not state when the tax would be rolled out.

But the International Monetary Fund (IMF) said Qatar’s sin taxes would start this year.

And last month, Saudi finance minister said they could be introduced across the GCC in April.

The Gulf is also on track to introduce a separate, value-added tax in 2018.

That consumption tax will most likely affect businesses. It is expected to exempt certain food items, as well as the cost of education, healthcare and social services.

Health spending

The decision to impose sin taxes comes at a time when Gulf countries are seeking additional revenue streams due to lower oil prices.

But another incentive to impose the fees could involve rising healthcare costs.

Qatar and other GCC nations heavily subsidize healthcare for their citizens, and the growing prevalence of diseases like obesity and diabetes are taking their financial toll.

Quinn Dombrowski/Flickr

Photo for illustrative purposes only.

By 2020, Qatar’s healthcare costs are expected to double to $8.8 billion a year as it contends with a larger, older and sicker population, Alpen Capital said.

BMI Research has forecast that the region will take these rising costs into account. In a report this month, it added that the longstanding obesity epidemic will be a key driver of policy decisions in the coming years.

Rising debt

Meanwhile, taxing luxury goods could provide residents a financial incentive to spend within their means.

That’s no small feat in Qatar, where 75 percent of the local population is in debt.

Chantelle D'mello / Doha News

Photo for illustrative purposes only.

A Qatar University study found this was in part due to social expectations on nationals to buy the “right” watches and handbags.

There is also pressure to have the “right” furniture or chocolates to offer guests, and to attend parties and give expensive gifts.

Concerned about this trend, Qatar’s Emir has urged residents to “cut extravagance and waste.” He’s also reminded them that the government can no longer “provide for everything.”

Thoughts?