Marubeni Consortium Wins Qatari Thermal Power Plant Contract

Qatar is one of those places on the map that is trying hard to put itself on the map. Home of Al Jazeera, an Arab emirate that lets women vote and run for local office, Qatar is a place that won’t be recognizable in a few years. Now, this oil-rich nation is building a thermal power plant, and a consortium led by Japan’s Marubeni has won the $2.3 billion contract. Nothing like planning ahead.

Marubeni, like a great many of Japan’s financial institutions, has discovered that rising prices for natural resources means big payoffs overseas. As a result, it and others are investing heavily abroad in everything from forest products to mining. What makes this energy plant project so interesting is its source of power – thermal, not oil and not nuclear. One wonders if any Iranians are watching the news from Qatar.

The deal gives Marubeni’s consortium 40% of the project, Qatar Electricity and Water Company gets a similar share and Qatar Petroleum gets the remaining 20%. The plant is expected to be finished in April 2010, and it will be built in the city of Mesaieed, the second biggest city in the country after the capital of Doha. The plant will generate 2,000 megawatts of power, enough to power 600,000 homes according to experts. Interestingly, Qatar’s entire population is 600,000 individuals. This power could be for export.

The project will boost Marubeni’s overseas electricity generating capacity to 3,100 megawatts. This is a milestone because when it reaches 6,000 megawatts, Japanese law permits it to spin-off those assets into a separate, stock-exchange-listed company. This reduces capital investment pressure on the balance sheet, and if done right, it could provide a windfall to the company. Even if it doesn’t sell off these assets, power generation provides a fairly constant income stream.

So, Qatar moves itself forward in technology and the ability to develop a modern society. Marubeni gets a shot at a steady income. The definition of a good business deal is one where everyone benefits. One wonders if any American or British companies failed in this because of their nations’ actions in nearby Iraq.

© Copyright 2006 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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